SC notice on plea alleging money laundering of Rs 12,800 cr due to inaction of central agencies

New Delhi:- The Supreme Court on Monday issued notice on a plea claiming glaring inaction by central agencies – the CBI, the ED, and the SFIO — into the alleged criminal theft and money laundering of Rs 12,800 crore from over 27 public, government and listed banks by Amtek Auto Ltd (AAL) and its promoters, directors, beneficiaries, and key managerial personnel through an elaborate system of over 127 related parties and several ‘benaamidars’.

The petition has been filed by advocate Jaskaran Singh Chawla through advocate Sameer Srivastava.

A bench, headed by Chief Justice U.U. Lalit and comprising Justice S. Ravindra Bhat, after hearing submissions from advocate Jai Anant Dehadrai issued notice on the plea and scheduled the matter for further hearing on October 11. The plea has made the Ministry of Corporate Affairs (MCA), the CBI, the ED, and the SFIO, as respondents.

Dehadrai submitted that Section 7, IBC petition against Amtek was admitted on July 24, 2017, and an IRP (interim resolution professional) Dinkar Venkatsubramanian (former E.Y. partner) was appointed.

“IRP confirmed as RP on August 22, 2017 and engaged EY to carry out a forensic audit report. On, March 13, 2018, detailed forensic audit report submitted to RP which discloses overwhelming evidence confirming fraudulent transactions intended to defraud creditors. Nature of fraudulent transactions, namely, (1) undervalued transactions, (2) preferential transactions, (3) transactions defrauding creditors, and (4) extortionate credit transactions,” he said.

Dehadrai added that forensic auditors failed to detect common benaami directors in 127 related parties which obtained fraudulent loans worth Rs. 1,358 crore. He said RP was responsible for: (a) deliberate concealment of AAL and related parties’ documents to auditors, (b) deliberate failure to pursue recovery of transactions defrauding creditors.

He added that despite evidence confirming large scale fraud to the tune of thousands of crore, no action was taken to investigate the larger conspiracy.

“A.32 r/w A.142 maintainable because MCA (R1) has directed SFIO (R4) investigation only against 2 AAL subsidiary companies, i.e., Castex Technologies and Metalyst Forging but not against AAL. And amounts of Rs. 2,320 crore are being probed in Castex Technologies Ltd and Rs 3,454 crore are being probed by SFIO in Metalyst Forgings, however, an amount of Rs. 12,700 crore of AAL are not being investigated,” he submitted.

The plea urged the top court to appoint a retired judge of the Supreme Court under whose stewardship the central agencies will conduct the investigation against the promoters, beneficiaries, key-managerial personnel, benamidaars, related parties and shell entities, and bankers of Amtek Auto Ltd.

The plea said: “That, not only should have this resulted in filing of criminal complaints with the investigating agencies to commence a thorough forensic audit of all such persons and entities involved, but the then-Resolution Professional ought to have moved the jurisdiction of the National Company Law Tribunal for recovery of these monies. Shockingly, neither happened in all these years, and AAL was subsequently liquidated at a haircut of 80 per cent causing enormous losses to the State Exchequer.”