12K Ponzi fraud? HC petition spills beans on Diamond Harbour company

KOLKATA: If true, this could well be the biggest financial fraud perpetrated in Bengal. Among the voluminous petitions now being filed in the Calcutta high court by hapless depositors of the now-bust Ponzi firms in Bengal, one puts the fraud figure at Rs 12,000 – four times that of Saradha, bigger even than Rose Valley. This matter, along with others, is expected to come up for hearing on September 18 before the division bench of chief justice Manjula Chellur and justice Joymalya Bagchi.
With Saradha first, then MPS, Rose Valley and I-Core coming under the purview of a CBI-Enforcement Directorate probe in Bengal after the Supreme Court’s May 9, 2014 order, the deluge of petitions in the HC indicate that the scam had multiple players and companies. Advocate Subhashish Chakraborty, who is arguing several such cases on behalf of the Surjya Sen street-based All India Small Depositors and Fieldworkers Protection Committee, says, “I have filed 30 such petitions myself. In all these we have pleaded that several representations made to the regulatory bodies have evoked no response. We have sought for an HC direction on these companies to sell their assets and refund investors and depositors. We have also demanded that this be done by an HC-appointed committee.”
In a petition filed by five depositors in the HC, The Kolkata Weir Industries Limited, a company registered under the provisions of the Companies Act, 1956 with its registered office in Diamond Harbor has been named a respondent (number 18). Asoke Chakraborty, a Baruipur-based depositor said, “I have invested Rs 2,10,000 myself. Anadi Mondal, a co-petitioner, has invested over Rs 50-lakhs.” This company, he alleges, had 339 branches spread across 19 states in India. This company was formed in May 2008. “An optimum estimate puts the average amount mobilized by every branch in a month is Rs 50-lakh. That is Rs 16.9 crore across branches. In a year, it would then mobilise Rs 2,034 crore. For the 52 months, it operated, it would therefore mobilise Rs 8,81,400 crores. This plus the mobilization it did before the company registration in which it worked in tandem with other companies.” Together, the petition in its paragraph 27 claims, “… (we) came to learn that as on date a total sum of Rs 12,000 crore is the liability …”

Advocate Srijib Chakraborty, who is arguing the case in the HC, said, “The figure is mind boggling. It just pains me to believe that such a fraud, though reported to police and regulatory authorities, had evoked no response.” Records accessed by ToI shows that the company has four directors, including its Chairman-cum- Managing-Director – a Diamond Harbour based businessman. According to a SEBI 2014 report, the company has investments in hotels (Digha, Tarapith, Diamond Harbour, Falta and Puri), a shopping mall, tea gardens in Jalpaiguri, water treatment plans, import-export units, educational institutions, jewelry showrooms and FMCG trading unit in Kolkata. All of these since its incorporation by the Registrar of Companies in May 26, 2009. The authorized capital of the company then was Rs 300 crore with Rs one-crore as equity shares and Rs 299-crore as preference shares.
While no company officials were available for a formal reaction to these allegations, the company in its representation to SEBI in January, 2014, claimed it has issued non-convertible redeemable preference shares, equity shares and raised funds though the Advanced Product Scheme for Rs 51.29 crores. Infact, the company claims, it had issued equity shares for Rs 5,05,000/- and non-convertible redeemable preference shares for Rs 47.9 crore through private placement only. In addition, the company had claimed that it is now carrying out a valuation of its assets through a Government registered valuer and determine its liability towards its investors, so that all can be repaid. The company had, therefore, sought for more time.