Saradha chit fund scam: NCLT orders closure of 13 group companies

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Published: December 12, 2018 5:06:15 AM

The order is in connection with the multi-crore Saradha chit fund scam.

The Kolkata bench of the National Company Law Tribunal (NCLT) has ordered winding up of 13 companies of the now-defunct Saradha Group, directing the official liquidator to take possession of assets and properties of all these companies. The order is in connection with the multi-crore Saradha chit fund scam.

The Serious Fraud Investigation Office (SFIO), which comes under the ministry of corporate affairs (MCA), had filed the winding-up petitions before the tribunal against the 13 Saradha Group entities under Section 271 (c) of the Companies Act, 2013, with Section 243 of the Companies Act, 1956, to initiate winding-up proceedings on the ground that the affairs of the companies had been conducted in a fraudulent manner and they had been formed for “fraudulent and unlawful purpose” and also for which the directors of the respective companies had been guilty of “misfeasance or misconduct”.

The group companies are — Saradha Tours & Travels, Global Automobiles, Saradha Housing, Bengal Media, Saradha Shopping Mall, Saradha Agro Development, Rose Capital, Saradha Construction Company, Saradha Education Enterprises, Saradha Garden Resort & Hotel, Saradha Landmark Company, Saradha Exports and Bhasank Foods.

The MCA had authorised SFIO to file winding-up petitions against these companies by an order dated November 2, 2017, on behalf of the Central government. The corporate frauds investigating agency, in its summary report, had produced before the tribunal details of the irregularities and contraventions
of the provisions of the Companies Act being committed by the promoters and directors of all holding companies of Saradha Group.

After the investigation, SFIO concluded that directors of the companies had violated provision of Section 56 (SA) of the Companies Act, 1956; cheated the public at a large, punishable under Section 415 and 420 of the Indian Penal Code, misappropriating Rs 2,542.62 crore; also misappropriated funds of Rs 6.59 crore through illegal transfer of shares and prepared false financial statements, among others.

“I have minutely gone through the report filed by the SFIO after thorough investigation of the affairs of the above companies. The report reveals that the affairs of all these companies were being conducted in fraudulent manner. There is every reason for me to believe that the companies were formed for fraudulent and unlawful purposes. The promoters/ directors of all the companies appeared to be guilty of offenses of fraud, misfeasance and misconduct relating to affairs of the companies…Hence, I held that all the above companies are required to be wound up by this tribunal,” Justice Madan B Gosavi said in his order on December 7.

Pronouncing the winding up order against these 13 companies, Justice Gosavi said, “The official liquidator attached to the Calcutta High Court is appointed as the official liquidator for winding up of all the above companies with direction to take possession of the assets and properties of all the companies.”
While Debjani Mitra is the official liquidator, the tribunal has restrained all the firms from disposing of their assets and properties. The group had collected money from over 17 lakh depositors through a Ponzi scheme before it collapsed in 2013.

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