Radia's companies under SFIO scanner: Moily

New Delhi: Corporate lobbyist Niira Radia’s companies have come under the scanner of the Serious Fraud Investigation Office (SFIO) of the corporate affairs ministry, more than a year after she attracted attention in the wake of telephone tapping episode.

The investigation was ordered following a report submitted by the Registrar of Companies (RoC), which found prima facie evidence of violations of various provisions of the Companies Act, 1956.[caption id=“attachment_370375” align=“alignleft” width=“380”]  Niira Radia.[/caption]

“Yes, I have ordered the SFIO to look into the case and submit a report within four months. We have prima facie found evidence against companies of the Niira Radia Group and we found it is a fit case to be referred,” Corporate Affairs Minister Veerappa Moily said.

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Radia was in news following leakage of her conversation with high profile businessmen, ministers and journalists with regard to allocation of 2G spectrum waves.

The clients of Radia included powerful business houses like Tata Group of companies, Mukesh Ambani-led Reliance Industries Ltd and real estate major Unitech.

The nine companies under scrutiny are Vaishnavi Corporate Communications, Vaishnavi Advisory Services, Leisure Clubs India, Claro Consultancy, Magic Airlines, Maansi Agro, Crownmart International India, Vitcom Consulting and Neucom Consulting Pvt Ltd.

According to the RoC report, Radia group companies including Vaishnavi Advisory Services, Noesis Strategic Consulting Services, and Vaishnavi Corporate Communications “have accounted for bulk revenue from consultancy business from Tata Group of companies and Unitech Ltd”.

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The report further said the issue of writing off of debts amounting to Rs 2.36 crore needed to be examined regarding the “nature and parties from whom the amounts were due and reasons for the writing off of these debts along with relationship with directors”.

When contacted, Tata Group spokesperson Debasis Ray said, “No, we are not aware of any write-off by any Tata company.”

Unitech said, “At the outset, we would like to submit that Unitech Ltd. has not given any loan to the Vaishnavi group of companies and, therefore, question of writing off such loans does not arise at all.”

The RoC report also pointed out various disclosures have not been made in the balance sheets, including the nature of consultancy from which it earned revenue.

“RoC Delhi has stated that the nature of consultancy and staff support services needed to be examined thoroughly as there are web of transactions among the group companies and circulation of funds in the garb of professional income and expenses as well as administrative expenses and rent paid

cannot be ruled out,” the report said.

The RoC submitted the report after examining the balance sheets of the companies for the years 2008-09 and 2009-10 and has reported non-compliances in all the companies.

Also, the RoC report said Vaishnavi Corporate Communications had made donations amounting to Rs 52.13 lakh and “the name of the parties, reason for donations and compliance of Section 293A needed to be explored”.

RoC Delhi has mentioned that the books of account and other records of M/S Vitcom Consulting Private Ltd and Neucom Consulting Pvt Ltd also needed to be examined.

This is in view of related party transactions and major revenue earnings by these companies from consultancy, the report said.

It also pointed out that Leisure Club India had secured a loan amounting to Rs 12 crore from HDFC Bank and this has been utilised for purchase of property.

“RoC Delhi has suggested that as the obtaining of loan and purchase of property was made between March 26, 2010 and March 31, 2010, these need to be examined thoroughly regarding the ownership of property and compliance of section 49 of the Act,” the report said.

It further said that some of the companies have accepted share application money from its group companies but no shares have been allotted against those applications.

“Prima facie these appear to be unsecured loans accepted in the garb of share application money… and need to be examined,” it said.

PTI