Monday, May 13, 2013

In elaborate con, city firm dupes HSBC of 330cr

Mumbai: The Economic Offences Wing (EOW) of the Mumbai police has registered a Rs 330-crore cheating and forgery case against a city-based company and its representatives for securing investment from multinational banking major HSBC with fake promises in the last three years.

Mumbai-based Avitel Post-Studio Ltd, which has two sister companies in Dubai and Mauritius, told the bank that they had entered into a contract with BBC (British Broadcasting Corporation) to upgrade their entire library in London from 2D to 3D format. The accused wanted to purchase technical equipment and software for the conversion and sought money from the bank. They submitted documents on the basis of which the bank invested in their company. Although the money trail from the bank to the company is not clear at present, HSBC later learned that the submitted documents had been forged. It then approached the Mumbai police for help.

Joint commissioner of police (crime), Himanshu Roy, said, “Prima facie, it’s a case of cheating. We will investigate further.”

Bengal chit fund boss held in J&K I n a major breakthrough in the West Bengal chit fund scam, Saradha Group boss Sudipta Sen, accused of defrauding investors of crores of rupees, was on Tuesday arrested from a plush hotel in Sonmarg in J&K along with Saradha Group executive director Debjani Mukherjee and senior official Arvind Chauhan. The trio had fled Kolkata on April 10.

Not clear how bank was taken in by con
Mumbai: City-based company Avitel Post-Studio Ltd had approached HSBC in 2010 asking the bank to invest in its upgradation project for BBC. Its ‘officials’ allegedly even arranged the bank representative’s meeting with an executive who claimed that he was representing BBC.

It’s not clear where the meeting took place and how the bank was convinced about the BBC representative’s genuineness.

Afterwards, the accused insisted that the bank disburse part of the required money immediately as they needed to pay their principal supplier. They submitted their company’s forged papers to the bank after which it invested in their company.

The bank later made enquiries with the BBC and found that they had not awarded any contract to the accused. The bank also found that the BBC representative who met them was a conman and all the submitted documents were forged.

On Tuesday, an EOW officer visited D N Nagar police station along with the legal advisor of HSBC and registered the case. The case has been transferred to the EOW for further investigation.

Additional commissioner of police (EOW) Rajwardhan Sinha said, “The accused produced a fake agreement and documents to cheat the bank. We have registered a case against certain persons and during investigation if we come to know that more accused involved in the fraud, we will book them in the case.”
Vijay V Singh TNN


  1. MUMBAI: The police recently submitted a closure report in a Rs 330-crore alleged fraud case registered against a Juhu-based post-production company by a multinational bank. The case was closed after the investigating team found no evidence to substantiate the bank's allegations of forgery and fund diversion.

    In April, HSBC Holdings plc (Mauritius) filed a case with the economic offences wing (EOW) alleging that Avitel Post Studioz Ltd raised funds from it using forged documents and diverted the money to another firm. "The bank failed to produce documents in support of its claim. Our probe indicates that a false case was filed against the company," said an investigator.

    The bank had claimed that Avitel, which has a sister company in Dubai, produced forged documents to show that it had entered into a contract to upgrade the library of UK's BBC (British Broadcasting Corporation) from 2D to 3D format. The bank had alleged that Avitel arranged a meeting with a BBC representative in a London hotel. The money Avitel raised from the bank was to be used to purchase of equipment and programmes to fulfill BBC's contract, but the Juhu company used it for other purpose, HSBC had alleged.

    According to the report, Avitel allotted a 7.8 % equity stake to HSBC in return for its investment and the two had signed a share subscription agreement and a share holder agreement in 2011. Neither agreement mentioned the BBC contract as a pre-condition to the investment. It was also not mentioned in the term sheet, said an officer. There was also no invitation to HSBC from Avitel to participate in a meeting with a BBC representative. "During investigation, HSBC officials said that they did not receive an invitation for the meeting (with the BBC representative), but were informed on the phone. The bank failed to produce any evidence to support its claim," said an officer.

    "We attached an HSBC report with the closure report where it had mentioned that its officials visited the Avitel office in Dubai to examine the purchased equipment and showed satisfaction over the progress of work," said the officer.

    The investigator said that Avitel didn't forge any documents as alleged by HSBC. "It was a business transaction between two firms, but the bank filed false case against Avitel after a dispute. We decided to close the case and filed a report in court for final approval," said a senior officer.

  2. INR 330 CR is not a small amount and HSBC wouldn't file a case as per its whims and fancies . What did this fir do with this sum ?