Dalmia Cement (Bharat) on Wednesday moved the Supreme Court seeking modification of its earlier order that had asked IL&FS Securities Services (ISSL) to release mutual fund units worth Rs 344.07 crore to the cement manufacturer, subject to the latter providing appropriate bank guarantee (BG) of same value to the satisfaction of the Karkardooma court.
While the Dalmia Bharat group had sought modifications of the SC’s September 9 interim order to the extent that its securities be returned to it as it was the lawful owner, it also wants a direction to the trial court to return/release original bank guarantee of Rs 344.07 crore on the grounds that furnishing security during the pendency of the criminal trial, which may take several years to complete, for release of its own stolen MFs will cause unnecessary financial hardship and loss of reputation in the market. The BG of Rs 344.07 crore was furnished by it as a security for release of its own MFs, which were allegedly stolen by Allied Financial Services Private Ltd (AFS) early 2019, seized during the investigations.
While senior counsel Mukul Rohatgi, appearing for Dalmia, sought urgent hearing in the matter, counsel Gauri Rasgotra opposed the plea, saying its the third time the Dalmia group is seeking modification of the SC’s interim orders. According to the cement firm, even after collusion, fraud and forgery have been unearthed by three different investigative agencies — Sebi, EoW and SFIO — in respect of fraudulent transfer of securities, ISSL and Allied Financial Services (AFS) continue to “create unnecessary roadblocks in hassle free enjoyment” of its own property due to their unw-arranted resistance. “Despite overwhelming evidence of their culpability having surfaced during investigation, IL&FS and Allied are still hell bent upon bleeding Dalmia in every possible manner only because it dared to report the matter to the government agencies to save and recover its own property from their clutches,” the application stated.
Dalmia had alleged that AFS had fraudulently and unauthorisedly transferred MF units from the demat accounts of its two subsidiaries — OCL India (OCL) and Dalmia Cement East Ltd (DCEL) — and placed them as security with ILSS as collateral for Allied’s own transaction-margin obligations. It had also lodged a complaint in February 2019 with Sebi and also with the Economic Offences Wing, Delhi Police (EoW) against Allied, ISSL, NSDL and their officials.
While the market regulator had in December 2019 issued a show-cause notice to ISSL, EOW had also filed a chargesheet against ISSL and Allied for various offences including cheating in a Delhi court.
As per the findings in the chargesheet, Allied and ISSL allegedly colluded with each other and fraudulently transferred the MF units from the demat accounts of OCL and DCEL to their own accounts and related entities by forging the signatures of the authorised signatories of OCL and DCEL on Delivery Instruction Slips.
The trial court had earlier dismissed Dalmia Bharat group’s plea for release of stolen MF units after ISSL had raised objections to the maintainability of the application in view of the SC’s interim order.