Vijay Mallya, Captain Gopinath in SFIO crosshairs for alleged violation of Companies Act

A case has been filed against fugitive liquor baron Vijay Mallya and Captain Gopinath – founder of Air Deccan – and 18 others for a range of issues from window dressing of published finance to non-compliance of compulsory accounting standards. The case was filed by the Serious Fraud Investigation Office (SFIO) that functions under the jurisdiction of corporate affairs ministry, according to a report in The Times of India.

Others named in case are  KPMG, Grant Thornton, SBI Caps and Ambit. United Breweries Ravi Nedungadi, the now-defunct Kingfisher Airlines' finance director, A Raghunathan and UB Holdings Managing Director Harish Bhatt also figure in the list.

As regards Kingfisher Airlines', the case pertains to Rs 6,400 crore that the airline had raised as loan from banks. The Bengaluru city civil court has issued summons in this regard.

Vijay Mallya.

Vijay Mallya.

In its report to the corporate affairs ministry, the Registrar of Companies (RoC) has highlighted certain irregularities. The RoC has claimed impropriety on part of promoter directors of the said companies and alleged that these office bearers booked guarantee commission without keeping the secured lenders in published accounts.

After the matter came to light, the central government has instructed ministry of corporate affairs to conduct an investigation. It had also directed, while using powers granted to it under the Companies Act, the MCA to start proceedings against the accused persons under various provisions of the Companies Act.

According to SFIO, SBI Caps did not pay heed to the business plans and financial projection by Seabury, the aviation experts. It also alleged that SBI Caps did not do due diligence on Kingfisher Airlines brand valuation — which was valued at Rs 4,111 crore — and was more than 60 percent of securities offered to lenders, the TOI  report said.

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Updated Date: Jan 10, 2018 16:31:02 IST

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