Although the Vedanta Resources-owned Sesa Goa clarified on Monday that the company was yet to receive any report from the Serious Fraud Investigation Office (SFIO), the company?s shares closed 4.46% lower at R280.80 on the Bombay Stock Exchange.
?The company is yet to receive the report and therefore, unable to comment with detailed explanation on the issues floating in the media,? a notice to the stock exchanges said, adding that the company ?maintains a high level of transparency and follows the best standards of corporate governance?.
A report in the media late last week said the SFIO has accused Sesa Goa of ?serious financial irregularities, primarily in the period when it was controlled by Japan?s Mitsui & Co?.
In a report submitted to the ministry of corporate affairs, the SFIO is understood to have said that between 2003 and 2008, Sesa Goa under-invoiced exports, causing the company a cumulative loss of R1,002 crore.
It said Sesa Goa lost another R40 crore by inflating the commission paid to agents involved in exporting ore to various parties, including Mitsui & Co.
According to the media report, SFIO has said the irregularities were serious enough to warrant the prosecution of three managing directors of Sesa Goa between 2001 and 2007, including PK Mukherjee, who still holds that position. Speaking to a television channel, Mukherjee observed that the SFIO had asked the company for documents including invoices, bills and contracts with the bulk of the documentation pertaining to the period before March 2007.
?They have visited our offices and we understand that they have also interacted with other departments like the IT departments. However, we do not have a copy of the report and do not know how they have dealt with our submissions.?
The Anil Agarwal-promoted Vedanta Resources had entered into an agreement with Cairn Energy Plc in mid-August last year to buy up to 60% of the equity in Cairn India for up to $9.6 billion. Consequently, in April this year, Sesa Goa made an open offer to acquire shares held by minority investors at R355 apiece. It also picked up an 11% stake in Cairn india from Petronas at R331 per share.