Table of Contents
- Examining violations by Indiabulls Group: Centre informs Delhi HC
- RBI rejects proposal for Indiabulls’ merger with Lakhsmi Vilas Bank
- HC seeks centre, RBI’s response, on plea alleging misappropriation of funds by Indiabulls
- Indiabulls Housing moves SC, seeking urgent listing of plea that alleged misappropriation of funds
- Plea in SC seeks action against Indiabulls Housing, for misappropriating Rs 98,000 crores of public money
- Delhi court issues notice to Indiabulls Real Estate on cheating plea
Senior advocate Rajiv Nayar, appearing for Indiabulls Housing Finance Ltd (IBHFL), on November 29, 2019, informed the Delhi High Court that the company was not being lent money by any bank, on the grounds that it was under the scanner of the high court and as a result, it was unable to lend to anyone leading to its business coming to a standstill. Nayar urged the court to observe that the litigation should not come in the way of its normal business. A bench of chief justice DN Patel and justice C Hari Shankar, however, declined to make any such observation, saying ‘no-no’.
The court issued fresh notices to the National Housing Bank (NHB) and the Registrar of Companies, as neither had they filed their response to the petition, nor were they represented by any lawyer. The bench also gave more time to the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Serious Fraud Investigation Office (SFIO), to file their replies and listed the matter for hearing on February 28, 2020.
Examining violations by Indiabulls Group: Centre informs Delhi HC
The centre has informed the Delhi HC that it was examining the violations pointed out in two inspection reports on the Indiabulls Group
November 29, 2019: The Ministry of Corporate Affairs (MCA), on November 28, 2019, informed the Delhi High Court that it was examining the violations pointed out in two inspection reports, with regard to Indiabulls Venture Ltd (IBVL) and Indiabulls Housing Finance Ltd (IBHFL). The ministry, in its affidavit filed in response to a PIL by an NGO, alleging financial irregularities by IBHFL, said it has received inspection reports of IBVL and IBHFL and the report on Indiabulls Real Estate Ltd (IBREL) was awaited.
The ministry said that regarding the loans given by IBHFL to five companies, as mentioned in the petition, the report stated that loans given to three companies have been repaid and loans given to other two entities, are reported to be ‘standard accounts’. The affidavit said remaining issues/ violations reported in the inspection report were under examination and it would be dealt, as per law.
RBI rejects proposal for Indiabulls’ merger with Lakhsmi Vilas Bank
An application for the merger of Indiabulls Housing Finance with Lakhsmi Vilas Bank, made in May 2019, has been rejected by the Reserve Bank of India
October 10, 2019: The Reserve Bank of India (RBI), on October 9, 2019, rejected non-banking lender Indiabulls Housing Finance’s (IBHF’s) proposal, to merge with the capital-starved private sector lender Lakhsmi Vilas Bank (LVB). Both LVB as well as IBHF informed the bourses about the RBI decision but did not specify the reasons for the same, which however, for many was in the offing, given the regulator’s stated opposition to corporates and realty-focused entities entering the banking arena. “The Reserve Bank has informed us that the application for voluntary amalgamation of IBHF and Indiabulls Commercial Credit with LVB cannot be approved,” LVB informed the exchanges.
The merger proposal had already received all other approvals, including those from the fair trade watchdog. The application for merger was made in May 2019, after both the parties agreed to the merger in April 2019. Entering the banking space would have given IBHF access to cheap deposits and saved it from crisis, like that being faced by shadow banks now, while the promise of capital infusion would have helped revive the fortunes of the Tamil Nadu-based lender, which was put under the prompt corrective action framework in September 2019, which puts a lot of curbs on its operations. For FY19, LVB’s net NPAs stood at 7.49%, capital adequacy ratio was at 7.72% and its return on assets was a negative 2.32%. It had reported a net loss of Rs 894.10 crores in FY19. During the past five months, a complaint was also filed against LVB with the Economic Offences Wing of the Delhi Police, for cheating and misappropriation of funds.
HC seeks centre, RBI’s response, on plea alleging misappropriation of funds by Indiabulls
The Delhi HC has sought the response of the centre and the RBI, on a plea seeking an SIT investigation into the alleged misappropriation of funds by the promoters of Indiabulls Housing Finance Ltd
September 27, 2019: A Delhi High Court bench of chief justice DN Patel and justice C Hari Shankar, on September 27, 2019, issued notice to the central government, the Reserve Bank of India (RBI) and Indiabulls, seeking their stand on the petition filed by an NGO that alleged illegalities, siphoning of funds and violations committed by the promoters of Indiabulls Housing Finance Ltd. The court listed the matter for further hearing on December 13, 2019.
The court was hearing the PIL filed by NGO ‘Citizens Whistle Blower Forum’, whose members include former Delhi high court chief justice AP Shah, former chief of naval staff admiral L Ramdas, former IAS officer Aruna Roy and activist-lawyer Prashant Bhushan. The plea has sought an SIT investigation into the alleged illegalities, siphoning of funds and violations committed by the promoters of Indiabulls Housing Finance Ltd.
The plea alleged that Indiabulls Housing Finance Ltd, through its promoters and their various group firms and subsidiaries, had been advancing dubious loans to companies owned by large corporate groups. They, in turn, have been routing the money back into the accounts of companies owned by the promoters of Indiabulls, so as to increase their personal wealth, it alleged. Indiabulls had earlier opposed the plea, saying it was a ‘malicious’ and ‘mala fide’ petition, which was causing loss to its business and reputation.
Indiabulls Housing moves SC, seeking urgent listing of plea that alleged misappropriation of funds
Indiabulls Housing Finance has moved the SC, seeking urgent listing of a plea that alleged misappropriation of public money by the company, saying that the allegations had damaged the company
June 12, 2019: Indiabulls Housing Finance Ltd (IHFL), on June 12, 2019, moved the Supreme Court, seeking urgent listing of a plea filed against it, in which it has been alleged that the company misappropriated Rs 98,000 crores of public money. Senior advocate AM Singhvi, appearing for the company, mentioned the matter for urgent listing before a vacation bench comprising justices Indira Banerjee and Ajay Rastogi.
Singhvi told the bench that frivolous allegations had been levelled against the company in the petition and the plea was leaked to the media. He said that due to the media reports regarding filing of the petition against the company, IHFL, had incurred loss of around Rs 7,000 crores of its market share. The bench said it would take a decision during the course of the day, about listing of the plea.
Plea in SC seeks action against Indiabulls Housing, for misappropriating Rs 98,000 crores of public money
A plea has been filed in the SC, seeking legal action against Indiabulls Housing Finance Limited, its chairman and directors, for the alleged misappropriation of Rs 98,000 crores of public money
June 11, 2019: A petition filed in the Supreme Court on June 10, 2019, has alleged that money worth thousands of crores were siphoned off by Indiabulls Housing Finance Limited (IHFL) chairman Sameer Gehlaut and the directors of Indiabulls, for their personal use. Abhay Yadav, the petitioner and one of the IHFL shareholders, alleged that Gehlaut, with the help of one Harish Fabiani – an NRI based in Spain – allegedly created multiple ‘shell companies’ to which IHFL loaned huge sums of money, under ‘bogus and non-existent pretexts’. These companies further transferred the loan amount to other companies, which were either run, directed or operated by Gehlaut, his family members or other directors of Indiabulls, the plea alleged.
“This entire chain of scam would have never been possible, without the conniving with the auditors, credit rating agencies and concerned officials of the respective government departments,” the plea said. The plea also sought directions to Securities and Exchange Board of India (SEBI), the centre, Reserve Bank of India (RBI), Income Tax Department or the competent authority, to restore, protect and conserve the defrauded and misappropriated investors’ money.
It alleged that Gehlaut was rich, influential, powerful and had extremely strong political connections and he, in conspiracy with the other directors, could leave the country with the money of investors. “Chairman Sameer Gehlaut, in conspiracy with the other directors, has mercilessly and heinously taken the public money of approximate more than Rs 98,000 crores for their exclusive personal use,” the plea said. It alleged that the ‘modus-operandi’ opted by Gehlaut and the alleged co-conspirators to defraud, not only the investors at large but also the public exchequer, was multi-dimensional, duly buckled-up with manifold layers of criminal and highly unlawful activities.
“Apparently, the sole purpose of this biggest and huge financial scam, was to take the entire public money of the innocent shareholders, PSU banks, private banks, etc., to make it for the criminally exclusive and unlawful purposes of Gehlaut and his family members. Shockingly, Gehlaut and his particeps criminis (co-conspirators) did not leave almost any financial enactments to violate,” it said. The plea further claimed that Gehlaut and his wife have also been deliberately involved in taking kickbacks from his alleged borrowers and misled the regulating authorities.
“Gehlaut and his particeps criminis have, while advancing the alleged loans to the dummy and shell companies, made various bogus entries while taking the interest on annual basis, instead of a monthly basis and by this way, neither TDS could have been deducted on timely manner nor even a single penny of late penalty has been paid to the public exchequer at the Income Tax Department, which resulted in further injury of more than hundreds of crores rupees,” it claimed. The plea further said that while building the dummy and shell companies, around Rs 1,700 crores from unknown sources were used, which was illegal and forbidden by the prevention of money laundering act.
“They have also done the gross criminal violation and willful heinous misconduct against the SEBI laws as well, by not following of express provision of SEBI and Companies Act’s Corporate Governance Policy… have also violated the RBI & NHB guidelines and other laws, as well,” it claimed. The company officials were the directors, promoters and beneficiaries of interconnected non-banking finance companies at Delhi, Mumbai and Gurugram, the plea said.
Delhi court issues notice to Indiabulls Real Estate on cheating plea
A Delhi court has issued a notice to Indiabulls Real Estate Ltd, on a criminal complaint seeking the lodging of an FIR against the developer for allegedly cheating buyers by collecting funds for its project Indiabulls Enigma in Sector 110, Gurgaon
December 15, 2016: A Delhi court has issued a notice to Indiabulls Real Estate Ltd and its subsidiary firm Athena Infrastructural Ltd, on a criminal complaint seeking the lodging of an FIR against them for allegedly cheating buyers and embezzling funds.
Additional sessions judge Raj Kapoor, sought a reply from 22 respondents including the builder, its directors and the Delhi Police on the plea and listed it for arguments on December 23, the next date of hearing. “Issue notice to the respondents for the next date. Copy of the revision petition be also given to the prosecutor for the state,” the court said.
The revision petition was filed by a woman challenging the order of a magisterial court, which dismissed her plea for lodging of an FIR against the builder and its officials, claiming that the trial court had ignored the issue of alleged conspiracy to commit the offences of criminal breach of trust, cheating, embezzlement of funds, dishonest inducement and misappropriation with fraudulent intention under the IPC.
The petition, filed through advocate Arpit Bhargava, alleged that Indiabulls Real Estate Ltd used Athena Infrastructural Ltd as a conduit, to collect funds from gullible customers like his client, saying that it was developing a project by the name of Indiabulls Enigma in Sector 110, Gurgaon. The flat was booked in November 2011, by paying Rs five lakhs as booking amount and till 2014, the woman had made a total payment over Rs 1.8 crores to the builder, it said. The project was scheduled to be completed within three years from the date of signing the agreement (January 30, 2012) but neither the possession of the flat was handed over, nor any information was given about its status, it said. The plea claimed that the builder took 90% of the total value of the property from the woman but it appeared that the project site was abandoned and neither the site nor connectivity from Dwarka Expressway seemed to be heading anywhere.
The petitioner has also approached the National Consumer Commission against the builder, for deficiency in service and the matter is pending.
“The respondents have not only cheated the petitioner of her hard-earned money but also many others, who bought units/apartments etc., in the project Enigma. It is apprehended that more than Rs 500 crores have been collected by the respondents in connivance with each other and there is a possibility that they may run away to a foreign country, in case immediate action is not taken,” the petition said.
It said a complaint was given at the Connaught Place police station but no action was taken and also added that during the pendency of the criminal complaint, the woman received a cheque of over Rs 1.8 crores from the builder towards principal amount only in April 2016 and no interest.