SC issues notice on plea seeking SIT probe into Indiabulls ‘illegalities’

New Delhi, Nov 29 (IANS) The Supreme Court on Friday agreed to examine a plea seeking an in-depth, thorough and time-bound investigation by a SIT into alleged “illegalities” of Indiabulls Housing Finance Limited (IHFL).

A bench of Justices Abhay S Oka and AG Masih issued notice on the petition filed by Citizens Whistle Blower Forum (CWBF) and sought responses from IHFL, now renamed as Sammaan Capital Ltd, and others in the matter.

The plea before the apex court said that based on public records, ROC documents and financial statements, the IHFL had been extending huge loans to various companies and these companies in turn have been routing a substantial part of the money as investment in companies belonging to the key-shareholders/promoters of IBHFL, including Sameer Gehlaut, the founder and the then Chairman of IBHFL.

“In other words, borrowing companies bestow huge benefits to the key shareholders and Chairman of the IBHFL for the favour they get in the form of loans from IBHFL,” it added.

Further, it said that since the funds with IBHFL are essentially its borrowings from public sector and private sector banks and investments of its depositors, “thousands of crores of public money seem to have been siphoned out by the company in order to financially benefit its promoters”.

Earlier in February this year, the Delhi High Court had rejected CWBF’s plea seeking direction for an SIT investigation into various serious illegalities including round-tripping of funds, violations of provisions of the Companies Act, and siphoning of funds committed by the promoters of IHFL, its subsidiaries and their promoters.

The special leave petition (SLP) filed before the apex court said that the Delhi HC failed to appreciate that many of the companies to which IBHFL has extended these loans have a small paid-up capital, do not have any fixed assets and are not even engaged in any business activities.

“The directors and office addresses of many of these companies are also common. A majority of these borrower companies have also failed to file charge with the Ministry of Corporate Affairs (MCA). That merely because the borrowing companies have paid back some of the dubious loans advanced to it, does not imply that the promoters of Indiabulls did not benefit from the same,” contended the SLP filed through advocate Neha Rathi.

It added that mere repayment of loans does not absolve a company and its promoters from criminal liability and investigation, especially when such a company has further taken various loans, possibly to show repayment in its book of accounts.

The plea contended that IHFL and its promoters are in violation of various statutes and policies like evasion of Income Tax, violation of rules and regulations of Reserve Bank of India (RBI), SEBI, National Housing Bank and other laws but none of the authorities have taken any action.

The petitioner said that the “instant scam” follows close to the heels of scams such as those perpetrated by ICICI Bank, IL&FS and Dewan Housing Finance Limited and illustrates how promoters and persons in charge of large NBFCs have looted public monies invested in them and diverted them to their own companies using a web of shell companies.

Indiabulls, a leading finance company and now an NBFC, was founded by Sameer Gehlaut in 1999 and went public with listing on the Bombay Stock Exchange (BSE) in 2004.

Suspecting tax evasion by Indiabulls, the Income Tax Department carried out massive raids at 20 premises of the company in Mumbai and Delhi.

Thereafter, in June 2019, the Income Tax Settlement Commission issued an order directing Indiabulls to pay Rs 300 crore as tax and interest charges on the undisclosed income detected during the IT raid on the company, said the petition.

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