New management finds old owners engaged in fraud, Delhi HC asks relevant ministry to take action

The new management of SKS Power Generation Company has moved the Delhi High Court, alleging that the previous management had engaged in fraudulent activity and that a CBI enquiry has to be conducted into it.

The bench of Justice Suresh Kumar Kait, last Monday, had ordered that the Ministry of Home Affairs should take a decision on the representation made by the petitioner in this regard within four weeks.

The allegation in the plea was against the ex-management, ex-promoters, and ex-employees of the company. The bench had also made it clear that if the Ministry of Home Affair is of the opinion that the representation is to be decided by the Ministry of Company Affairs, the notice should be sent to the company in two weeks and the Ministry of Company Affairs shall take a decision within four weeks thereafter. That decision has to be communicated to the petitioner in writing within one week thereafter.

In June 2018, the power company was unable to pay its debts to its lenders, including public sector banks, such as SBI. The bank initiated action under the RBI’s Prudential Framework for Resolution of Stressed Assets. The company was subsequently acquired by Agritrade Resources Ltd, a Singapore-based company.

It is alleged by the current director of the power producing company, Abhijeet Kar, that the former management of the company comprised promoter Anil Mahabir Gupta, who was engaged in various fraudulent activities, including siphoning off funds of lenders to various related parties. The true extent of the liabilities of the company was not disclosed to Agritrade Resources at the time of acquisition. This came out only after the new management took over.

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The counsel of the company has produced before the bench, the forensic audit report and other documents that showed that Anil Mahabir Gupta and other members of the ex-management are prima facie liable for committing fraud on the company by siphoning off funds in order to personally enrich themselves.

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Source: ILNS
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