Supreme Court stays criminal proceedings against Premji, wife over merger of companies

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December 19, 2020 1:20 AM

Chennai-based NGO India Awake for Transparency had accused the Premjis of illegally transferring assets from the firms Vidya, Regal and Napean into a private trust and a new company in 2014 without following due process.

Senior counsel Abhishekh Singhvi argued that the trial court had failed to scrutinise the evidence thoroughly to find out the truthfulness of the allegations and should have ordered an inquiry before taking cognizance of the claims.Senior counsel Abhishekh Singhvi argued that the trial court had failed to scrutinise the evidence thoroughly to find out the truthfulness of the allegations and should have ordered an inquiry before taking cognizance of the claims.

The Supreme Court on Friday stayed proceedings initiated against Azim Premji and his wife by a Bengaluru court on a complaint alleging breach of trust and corruption arising out of the merger of their three firms with another group company, Hasham Investment and Trading Company.

Chennai-based NGO India Awake for Transparency had accused the Premjis of illegally transferring assets from the firms Vidya, Regal and Napean into a private trust and a new company in 2014 without following due process.

A Bench led by Justice Sanjay Kaul, while issuing a notice to the complainant NGO, stayed the criminal proceedings and summons issued by the trial court on allegations of criminal breach of trust and conspiracy under the Indian Penal Code and the Corruption Act, 1988.

Premji, his wife, Yaseem, and others had moved the Supreme Court challenging the Karnataka High Court’s May 15 order that dismissed their pleas to quash the summons.

Senior counsel Abhishekh Singhvi argued that the trial court had failed to scrutinise the evidence thoroughly to find out the truthfulness of the allegations and should have ordered an inquiry before taking cognizance of the claims.

According to Premjis, the complaints were “completely mala fide, misconceived, and dishonest” and may have been the result of a business partnership with Subhiksha’s R Subramanian going sour.

They said the criminal complaints filed by the NGO were masterminded by Subramanian nearly three years after the merger took place, adding that their group firm had to file criminal complaints against a Subramanian-owned company after cheques worth crores of rupees bounced in 2013, which are still pending.

“The complaints are mala fide /maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. The present proceedings are solely meant to harass and persecute the petitioner at the behest of Subramanian, who bears great animosity due to a strained commercial relationship with the petitioner,” the appeal filed through counsel Mahesh Agarwal said.

Besides, the complaints were liable to be quashed on the ground of gross suppression alone as the complainant had deliberately not disclosed the information that the HC had sanctioned the Scheme of Amalgamation in 2015/16 before the trial court, the petition said.

The NGO had alleged that Premji, his wife and others were entrusted with the dominion over properties and assets of three companies as directors. They were holding assets of these three companies with a total worth of Rs 31,342 crore in fiduciary capacity, without having any financial interest or ownership therein, the complaint said. It said the three companies belonged to the government and hence could not have been merged.

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