Mauritius bank files FIR against Khatau firm in Mumbai, says it has been cheated of ₹200 crore
Mumbai police have registered an FIR against businessman Yudhisthir Khatau, his wife Neerja, and director of firm Sumegh Modi.Updated: Jun 06, 2018 10:53 IST
The Economic Offences Wing (EOW) of the Mumbai police has registered a first information report (FIR) against businessman Yudhisthir Khatau, his wife Neerja Khatau, and Sumegh Modi, the director of Yudhishthir’s firm, Varun Corporation Limited, for allegedly cheating a Mauritius bank of $30 million — around ₹ 200 crore.
When HT contacted Yudhisthir Khatau, he denied the allegations. “We have not received any papers on this issue either from the Mauritius Commercial Bank or the Mumbai police, and are therefore, totally unaware of either the complaint or the case details.”
The case goes back to December 21, 2008, when the Mauritius Commercial Bank agreed to give $30 million to Real Point Mauritius Limited (RPML).
RPML is a subsidiary of Varun Corporation Limited in Mauritius. Sources claimed RPML was a shell company.
The bank filed its complaint through its authorised signatory, Anshul Sehgal. According to the complaint, the bank disbursed the amount after Varun Corporation gave it a corporate guarantee. However, in 2012, Real Point Mauritius Limited defaulted on its payment, the bank said. After this, the bank began proceedings against the firm and Varun Corporation Limited’s director in the Mauritian Supreme Court.
Around the same time, the bank also filed an insolvency petition against Varun Corporation Limited in the National Company Law Tribunal in Mumbai. In his response to this plea, Yudhisthir Khatau denied to have given any corporate guarantee, and also said he produced audited annual reports for the financial year 2008-09.
The bank, however, alleged that these annual reports and the corporate guarantee were forged so that RPML could get the money. The bank said, in this way, Varun Corporation Limited and its functionaries had cheated it.
The Mauritius Commercial Bank later also moved a magistrate court in Mumbai. The bank’s counsel, Sanjeev Kumar, said, “The magistrate was prima facie convinced that the complaint ought to be investigated by either the Azad Maidan Police Station or through the EOW, and such directions have accordingly been passed.”
Considering the nature of the alleged crime, the senior officers of the Mumbai police decided to transfer the case to EOW. This procedure took time, and the EOW has only recently started its investigation. For now, it has registered a case under sections 409 (Criminal breach of trust by public servant, or by banker, merchant or agent), 420 (cheating), 468 (Forgery for purpose of cheating), 477-A (Falsification of accounts), 107 (Abetment), 120-B (criminal conspiracy) and 34 of the Indian Penal Code, based on a magistrate court’s order.
“Relevant documents pertaining to the loan agreement and the alleged forgery are being collected and scrutinised and evidence is being gathered. We have also started recording statements of witness, but are yet to make an arrest,” said an officer privy to the probe.
Yudhisthir Khatau maintained that he did not know of the case, but added, “Being directors of the company, we are fully aware of the affairs of the company and therefore can simply state that the guarantee in question was not approved or taken on record by the Reserve Bank of India, and therefore, there was no valid guarantee issued to the bank.
Khatau added that all accounts given to the bank had been signed by the firm’s auditors and directors. “Therefore, there is no issue of falsification at all,” he said. Khatau added, “Based on this guarantee that the bank claimed existed, it last year (2017) moved the NCLT, which after hearing the matter, concluded that irrespective of whether RBI approved the guarantee or otherwise, the bank’s claim should be admitted and therefore the effect of the guarantee has already been given by the NCLT to MCB (the bank).”
“We fail to understand what further remedy MCB is seeking through a criminal complaint, as the existence of a valid guarantee was the matter of a civil suit, which has already been concluded and disposed of,” Khatau said.