In November 2007, as Central Bureau of Investigation (CBI) officers raided then provident fund commissioner KS Arya for misappropriation of funds on behalf of a private firm, they stumbled upon a set of documents that made their eyes pop out. The papers seemed to indicate that real estate pioneer Hiranandani Group had paid provident fund for only part of its workforce while keeping the rest of the money due for itself, said CBI sleuths on condition of anonymity.
On Tuesday, the CBI raided five Hiranandani Group companies across seven locations in Powai and Nariman Point to uncover the full extent of the misappropriation.
The money — Rs 168 crore over 2003-05, according to the documents — should have gone into the provident fund coffers to secure the future of their staffers.
CBI officers said the group — which clocked a turnover of Rs 1,600 crore over the last year — would illegally gain a double benefit by showing salaries of all employees as an expense in the balance sheet, while paying provident fund for only a section of the workforce. Bogus bills, said the officers, were prepared for the rest of the money due.
The department has now registered cases of cheating and criminal conspiracy against Niranjan Hiranandani, his brother Surendra and four officers of the Regional Provident Fund Commissionerate.
G Mohanty, CBI spokesperson in Delhi, confirmed the raids and the amount. Niranjan told Hindustan Times in the evening: “We have complied with the law. However, we are cooperating with the officials.”
Last November, as the CBI quietly started to probe the group’s finances, it learnt that the Regional Provident Fund Commissionerate had raided the Hiranandanis in 2006 and uncovered the irregularity. “However, the commissionerate failed to take action,” said a senior CBI officer.
On March 29, the CBI lodged a first information report against the Hiranandani brothers, Arya (who is now posted in Kolkata), retired provident fund commissioner MR Yadav, assistant commissioners (provident fund) Rajnikant and K Gopalan, whose house in Vasai was also raided.
That information helped the CBI prepare for Tuesday’s raids on the real estate arms of the Hiranandani Group — Hiranandani Developers, Hiranandani Constructions, Hiranandani Properties, Roma Builders and Lake Meadows Hotels and Resorts.
The CBI is checking how long this racket continued. Income-Tax also visited the group’s Powai office in the evening.