Failed Firms Held Sen’s Ponzi Funds – Mail Today – 14-Nov-2014

November 15, 2014 - Uncategorized

 

In unravelling the complex financial trail of the Sudipta Sen-orchestrated Saradha scam, the Special Fraud Investigation Office (SFIO) team has found that the group’s books show money parked in seven companies with very low or even negative net worth. 

The SFIO report states that there was no economic rationale in investing in these companies and the books of accounts have been falsified.

“The common element in these acquisitions was that the companies so acquired by the group were mostly loss-making and continued to be so even after their acquisition by the Saradha Group. In brief, it could be observed that no financial benefit was derived by Saradha Group by acquiring or making investments in these companies,” the report states.

It has recommended the filing of charges against the Saradha board members as well as directors of some of these companies.

Investigations have also revealed that a large chunk of the money collected by the Saradha Group from the public was not routed through banking channels but was deposited directly with Sen in hard cash.

A hard disc obtained from Web Spiders, the company that prepared the software for the Saradha Group, has emerged as vital evidence in the scam and helped the SFIO team establish the cash trail.

The disc reveals that the Saradha Group had collected Rs 1,260 crore from the public which was not reflected in the books of accounts.

The directors of the company had also instructed Web Spiders “to prepare the accounts software in such a manner so as it may appear that the Saradha Group was a real estate developer and tour operator”, the SFIO report states.

The SFIO team has concluded that “the books of account of Saradha Group company SRIL have been manipulated to camouflage the source of funds and income and expenses of the company to befool the stakeholders into believing that the company was in the realty business”.

Investigations have revealed that payments have been shown as lease against rent of land when the company did not own any land.

The SFIO report states: “It is established that directors and officers of four companies of Saradha Group, namely SRIL, STTPL, SGRHPL and SHPL, with intent to defraud have altered and falsified the electronic record being maintained in SAFARI and thereby made themselves liable to be prosecuted under Section 477A of the IPC.”

Three officials of Web Spiders have been made prosecution witnesses and are not being accused in the case “because they themselves had not falsified the accounts or information but they had amended the facts in the electronic records as per instructions of the Saradha directors”, the report observes.

The seven companies in which the Saradha Group has shown to have invested large amounts not justified by the valuation of these companies include Bengal Media Private Ltd, Broadcaster Worldwide Ltd, Anubhuti Printers and Publishers Ltd and TV broadcasting channel GNN.

The SFIO report states that four of the transactions were completed and the remaining three deals could not be finalised although a substantial amount of funds was blocked in them. It also points out that the Saradha Group bought shares worth Rs 16.5 crore in Bengal Media Private Ltd, a media company with negative net worth and a lot of liabilities.

 

The SFIO notes that no valuation of the company was done and it has not been acquired for commercial consideration for repaying the investors from whom the group had raised funds. It has also recommended action under various provisions of the company law against the two companies for the falsification of accounts.

In the case of Broadcast Worldwide Ltd (BWW), which operates three satellite channels, including Tara Musik and TV South Asia, the investigation reveals that Saradha Group agreed to acquire 75.68 per cent shares in the company for as much as Rs 28 crore despite the fact that BWW had a negative net worth of (-) Rs 12.2 crore.

Similarly, in the case of GNN, a TV broadcaster, the SFIO report states that there was no justification for investing an amount of Rs 42.5 crore in a TV channel which was yet to acquire fixed assets, and the consideration amount was fixed only on the basis of the licence issued to the company.

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