RAJYA SABHA UNSTARRED Qs NO. 19 FOR 5TH Aug 2013 REGARDING EARLY WARNING SYSTEM TO DETECT FRAUD

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
RAJYA SABHA

UNSTARRED QUESTION NO. 19

ANSWERED ON MONDAY, THE 5TH AUGUST, 2013

EARLY WARNING SYSTEM TO DETECT FRAUD

QUESTION
19. SHRI N.K. SINGH:
Will the Minister of CORPORATE AFFAIRS be pleased to state:
(a) whether, to strengthen its capabilities to crack down on corporate wrongdoings, Serious Fraud Investigation Office (SFIO) has developed an early warning system to detect frauds;
(b) if so, the details thereof;
(c) the names of the organizations against whom Government has received representations/ complaints of financial frauds during the last three years;
(d) the action taken by Government against such organizations; and
(e) to what extent the new system would be effective in checking such corporate frauds?

ANSWER
THE MINISTER OF STATE (SHRI SACHIN PILOT)
(INDEPENDENT CHARGE)
IN THE MINISTRY OF CORPORATE AFFAIRS

(a) & (b) Yes, Sir. The Ministry of Corporate Affairs is in the process of developing an early warning system to detect cases of frauds. Pilot testing of the proposed system is expected to be completed during 2013-14.

(c) & (d) Complaints have been received against 154 companies/ organisations during the last three years. The Ministry has already ordered inspections u/s 209A and/ or investigation u/s 235 or scrutiny of the Balance Sheets and other documents u/s 234 of the Act in these cases. Some cases have been referred to the Economic Offences Wing of the concerned State Governments for further investigation. Names of the organisations are enclosed at Annexure-I.

(e) The alerts generated by the system will facilitate prevention of corporate fraud. Its efficacy can be evaluated after full operationalisation.
******

ANNEXURE-I
ANNEXURE REFERRED TO IN ANSWER TO PARTS (c) & (d) OF RAJYA SABHA UNSTARRED QUESTION NO. 19 FOR 5TH AUGUST, 2013 REGARDING EARLY WARNING SYSTEM TO DETECT FRAUD

NAMES OF COMPANIES AGAINST WHOM COMPLAINTS RECEIVED IN THE LAST THREE YEARS

SR. NO. / NAMES OF COMPANIES
1. Basil International Limited
2. Nixcil Pharmaceuticals Specialities Limited
3. Appeline Cosmetics & Toiletries Limited
4. Vamshi Chemicals Limited
5. Basil Express Limited
6. Leisure Club India Private Limited
7. Magic Airlines Private Limited
8. Crownmart International India Private Limited
9. Vaishnavi Corporate Communication Private Limited
10. Vaishnavi Advisory Services Private Limited
11. Noesis Strategic Consulting Services Private Limited
12. Claro Consultancy Private Limited
13. Speak Asia (Un-registered Company)
14. Reebok India Limited
15. Talbros Limited (Listed Company)
16. Shark Communications Private Limited
17. Hitech Computech Private Limited
18. Konichiva Builders Private Limited
19. Bharti Properties Private Limited
20. Heena Developers Private Limited
21. Saksham Infocom Private Limited
22. North India Securities Private Limited
23. Krishna Infomedia Private Limited
24. DMC Education Limited
25. Centenary Software Private Limited (Presently known as T and G Edutech Private Limited)
26. Alchemist Infra Limited
27. SGI Research & Analysis Limited
28. Wealth Line Promoters Pvt. Ltd.
29. Tycoons Empire International Ltd.
30. Unipay 2U Marketing Pvt. Ltd.
31. TIK Innovator’s Marketing Ltd.
32. Trillions India Distributors Ltd.
33. SGS Agro Farms Ltd.
34. Max Pro Marketing Pvt. Ltd.
35. Gold Sukh Trade India Ltd.
36. Oro Trade Network India Ltd.
37. Maithri Plantations and Horticulture Private Limited
38. Akshayagold Farms and Villas India Limited
39. Abhayagold Infratech India Limited
40. Bommarillu Farms & Villas Ltd
41. Raji Vedant Constructions Private Limited
42. Unigateway 2U Trding Pvt Ltd
43. TV1 Express Holidays Pvt Ltd
44. Vega Zeal Marketing Pvt Ltd
45. Megacity (Bangalore) Developers and Builders Limited
46. City Airlines Private Limited
47. City Communication Ltd.
48. City Money Ltd.
49. City Realcom Ltd.
50. City Limouzines (India) Ltd.
51. Car Runway India Ltd.
52. Shivaji Estate Livestock and Farms Pvt. Ltd.
53. Arrow Global Agrotech Ltd.
54. ACE Agro Products Ltd.
55. Adventure Country Resorts Ltd.
56. Hiramani Agro Plantation Pvt. Ltd.
57. Green Gold Agriculture (India) Ltd.
58. Aryarup Tourism and Club Resorts Pvt. Ltd.
59. Akshay Plantation Ltd.
60. Suman Motels Ltd.
61. AIM Resorts (India) Ltd.
62. Shree Om Sainath Car on Rent Ltd.
63. Pan Card Club Ltd.
64. Praptee Marketing Service Pvt. Ltd.
65. Red Carpet Entertainment and Marketing Pvt. Ltd.
66. Websoft Marketing Pvt. Ltd.
67. Maitriya Plotter and Structure Ltd.
68. BIM Finance and Investment Consultancy Pvt. Ltd.
69. Royal Twinkal Star Club Ltd.
70. Newlooks Retails Pvt. Ltd.
71. G-Link Revenue e-com Pvt. Ltd.
72. Speakasia Online Pte Ltd.
73. Mangal Murthy Auto Linked Pvt. Ltd.
74. Parees Enterprises Corporation Ltd.
75. Heramb Properties Pvt. Ltd.
76. HMbjs Properties Pvt. Ltd.
77. Maitriya Services Pvt. Ltd.
78. Sai Prasad Foods Ltd.
79. Samruddha Jeevan Foods India Ltd.
80. Multiventure Agro and Infrastructure Pvt. Ltd.
81. Zerostart Trading Pvt. Ltd.
82. Primestart Trading Pvt. Ltd.
83. Hindustan Sugars Ltd.
84. Samruddha Jeevan Entertainment Pvt. Ltd.
85. Samruddha Jeevan Construction Pvt. Ltd.
86. Samruddha Jeevan Finvest Ltd.
87. Samruddha Jeevan Infotech India Pvt. Ltd.
88. Samruddha Jeevan Hotels and Hospitality Pvt. Ltd.
89. Samruddha Jeevan Orchard Resorts Pvt. Ltd.
90. Samruddha Jeevan Milk and Milk Products Pvt. Ltd.
91. Samruddha Jeevan Trading and Manufacturing Company Pvt. Ltd.
92. Rose Valley Real Estate & Construction Ltd.
93. Rose Valley Industries Ltd.
94. Silver Valley Communications Ltd.
95. Rose Valley Food Beverages Ltd.
96. Rose Valley Marketing India Ltd.
97. Rose Valley Infotech Pvt. Ltd.
98. Rose Valley Hotels and Entertainment Ltd.
99. Rose Valley Projects Ltd.
100. Rose Valley Patrika Ltd.
101. Rose Valley Films Ltd.
102. Modern Investment Traders Pvt. Ltd.
103. Rose Valley Travels Pvt. Ltd.
104. Brand Value Communications Ltd.
105. Rose Valley Housing Development Finance Corporation Ltd.
106. Rose Valley Airlines Ltd.
107. Rose Valley Fashions Pvt. Ltd.
108. Rupasi Bangla Projects India Ltd.
109. Rupasi Bangla Media and Entertainments Ltd.
110. Rose Valley Realcom Ltd.
111. M/s Saradha Realty India Ltd.
112. Saradha Agro Development Ltd.
113. Saradha Exports Ltd.
114. Saradha Shopping Mall Pvt. Ltd.
115. Saradha Printing & Publication Pvt. Ltd.
116. Saradha Tours & Travels Pvt. Ltd.
117. Saradha Education Enterprise Ltd.
118. Saradha Construction Company Pvt. Ltd.
119. Saradha Garden Resorts & Hotel Pvt. Ltd.
120. Saradha Landmark Cement Pvt. Ltd.
121. Rose Capital Ltd.
122. Bengal Media Pvt. Ltd.
123. Bhasank Food Pvt. Ltd.
124. Global Automobiles Ltd.
125. M/s Icore E-services Ltd.
126. Icore Apparels Pvt. Ltd.
127. Icore Paints Pvt. Ltd.
128. Icore Iron & Steel Pvt. Ltd.
129. Icore Super Cements Pvt. Ltd.
130. Riju Cement Ltd.
131. Mega Mould India Ltd.
132. Papyrus Infotech Pvt. Ltd.
133. Icore Global Medicines Pvt. Ltd.
134. Icore Jwellery & Gems Pvt. Ltd.
135. Icore Polyfab Pvt. Ltd.
136. Icore Housing Finance Corporation Ltd.
137. Sunshine India Land Developers Ltd.
138. Sunshine Mutual Benefit Limited
139. Sunshine Land Projects Limited
140. Sahu Investment Mutual Benefit Company Limited
141. Sahu Investment Corporation Limited
142. Nirmala Sahu Business Complex Private Limited
143. Shiv Nests Private Limited
144. Synergy Tie Up Private Limited
145. Nirmala Dwellings Private Limited
146. URO Infra Reality India Limited
147. URO Hotels and Resorts India Limited
148. URO Hygienic Foods Ltd
149. URO Infotech Limited
150. URO Lifecare Limited
151. URO Trexim Limited
152. URO Autotech Limited
153. URO Agro India Limited
154. URO Walkers Limited.
*****

MASSIVE CHIT-FUND FRAUD BY PUNE BASED SAI PRASAD GROUP

Despite the Madhya Pradesh High Court order, two orders of SEBI and more than seven FIRs in various states, Pune based Sai Prasad group had the temerity  to run their chit fund racket without any hindrance.

On 27th March, 2014, the district & session court of Thane (Maharashtra) issued an Inquiry Order against M/s. Sai Prasad Foods Limited/ Sai Prasad Properties Limited and its promoters and directors, Mr. BalasahebBhapkar, Mrs. VandanaBhapkar and ShashankBhapkar. On the basis of that order Nagar Police Station of Thane City has registered an F.I.R. (No. 62/2014) and initiated investigation into the matter.

In July 2013, the Securities and Exchange Board of India (SEBI) had passed two orders against both the companies of Sai Prasad group and restrained them from collecting money from the public. (Click the below link to see the detailed order):

SEBI’s Order against M/s. Sai Prasad Properties Limited;

http://www.sebi.gov.in/cms/sebi_data/pdffiles/26099_t.pdf

http://www.sebi.gov.in/cms/sebi_data/attachdocs/1374069736895.pdf

SEBI’s Order against M/s. Sai Prasad Properties Limited;

http://www.sebi.gov.in/cms/sebi_data/pdffiles/26098_t.pdf

http://www.sebi.gov.in/cms/sebi_data/attachdocs/1374069663484.pdf

In 2012, Madhya Pradesh High Court had ordered Central Bureau of Investigation (CBI) to conduct investigation against Sai Prasad Group and other similar nature companies, on the basis of that the CBI had conducted an investigation and revealed its findings as stated below:

“It is clear that the companies used to receive deposits from the citizens by floating various types of plans viz. installment plan and lump-sum payment plan against the sale of land units, plants and that of livestock. The companies entered into contract with the investors and they have committed offences under section 3 (1), 3 (2) and 3(4) of Madhya Pradesh NiveshkokeHitonKaSanrakshanAdhiniyam 2000, Sec, 58B (5 and 5A), and 58 of the RBI Act, 1934, and Sec. 4, 5, and 6 of the Prize Chits and Money Circulation Schemes (Banning ) Act, 11978 and Sec. 420 of Indian Penal Code.” (Click the below given link to read an Order of MP HC)

http://www.dif.mp.gov.in/hcdecision13072012.pdf

Similarly more than seven criminal cases have been registered against M/s. Sai Prasad Foods Limited/ Sai Prasad Properties Limited and its promoters, directors, agents and branch managers in various states. Details of few cases are as under;

F.I.R.No. 15/12,Banswqada Police Station, Rajasthan

F.I.R.No. 136/13,Talcher Police Station,Odisha

F.I.R.No. 114/13,Ainthpali Police Station,Odisha

F.I.R.No. 635/13,Sikandarabad Police Station, Dis.Bulandshahar,UP

F.I.R.No. ***/**, Kanpur Police, UP

 M/s. Sai Prasad Foods Limited/ Sai Prasad Properties Limited and its sister concerns indulge in fraudulent fund mobilization rackets. They violate various rules, regulation and sections of the Securities and Exchange Board of India Act, 1992 by running “Collective Investment Schemes” illegally without permission of SEBI. They also violate the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, Maharashtra Protection of Interests of Depositors (In Financial Establishments) Act, 1999 and Rules, and Indian Penal Code, the Companies Act, 1956 and the Reserve Bank of India Act, 1934.  

                                               

 The promoters and directors of the company are projecting that M/s. Sai Prasad Foods Limited/ Sai Prasad Properties Limited and its sister concern companies are involved in business of sale purchase of land and foods products and are earning huge profits. But in fact, in the garb of projecting various business modules, they are luring innocent and uneducated people by offering heavy returns to invest their hard earned money in all the fake and bogus entities of Sai Prasad Group.

SAI PRASAD GROUP is paying heavy commission to their agents and middle men plus huge returns to investors, which is commercially not viable in such types of businesses. The group is claiming that they are paying heavy returns out of company's heavy profit, but in fact they are paying amount to an old investor, which they collect from the new investor and thereby circulating the money amongst the investors. These types of business practices creating criminal liabilities are punishable under the provision of and regulation of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, Maharashtra Protection of Interests of Depositors (In Financial Establishments) Act, 1999 and Rules, and Indian Penal Code.

Sai Prasad group is running joint ventures. But none of the investors get any land in return. They are in fact happy to get the money at the end of the maturity period. When the cycle of payments stops, the hard-earned money of the uneducated villagers will go down the drain.

The Sai Prasad Group had recruited around 12 lakh commission agents of various ranks, to lure the investors.  They are working part time/full time and convincing small investors by offering heavy returns. Agents of the group systematically join hundreds of investors in their unit and motivate them by giving a speech during a function or meeting organized at different venues.

Agents have received healthy commission including gifts like two-wheelers and even four-wheelers for recruiting people to join the scheme.

Court orders and investigations have failed to hinder the activities of Sai Prasad group in running their illegal chit fund scheme. Their Ponzy scheme is one such scheme.

Alert citizens should lead the way in creating awareness about this fraud and prevent innocent or ill-advised people from joining this chit fund.

Jai Hind,

Mohammed Usman,

President,

Forum for Fairness in Democratic System,

MUMBAI

Cell# 09322273393

पुणे की चिटफंड कंपनी साईं प्रसाद से सावधान!

महाराष्ट्र की आर्थिक राजधानी मुंबई से सटे शहर ठाणे के टाऊन पुलिस स्टेशन ने पिछले दिनों कथित चिटफंड कंपनी साईं प्रसाद फूड्स लिमिटेड, साईं प्रसाद प्रॉपर्टीज प्राइवेट लिमिटेड एवं उनके निदेशकों बालासाहेब भापकर, श्रीमती वंदना भापकर व शशांक भापकर के खिलाफ आपराधिक मामला दर्ज किया है। बता दें कि साईं प्रसाद समूह का मुख्यालय महाराष्ट्र के पुणे शहर के उपनगर पिंपरी–चिंचवड़ में है। (F.I.R.No. 62/2014,Nagar Pol.Stn. City-Thane, MAH)

यह जानकारी भी आम है कि साईं प्रसाद समूह की इन दोनों कंपनियों के खिलाफ इससे पहले मध्यप्रदेश, उत्तरप्रदेश, राजस्थान, छत्तीसगढ़, उड़ीसा समेत कई राज्यों में मामले दर्ज हो चुके हैं। साईं प्रसाद समूह के सभी निदेशकों व उनके एजंटों के खिलाफ अपराधिक मामले दर्ज होते रहे हैं। कई मामलों में तो उनके अधिकारी और एजंट गिरफ्तार भी हो चुके हैं।

F.I.R.No. 15/12,Banswqada Pol.Stn. Rajasthan
F.I.R.No. 136/13,Talcher Pol.Stn. Odisha
F.I.R.No. 114/13,Ainthpali Pol.Stn. Odisha
F.I.R.No. 635/13,Sikn’bad Pol.Stn. Dis.Buld’shr,UP
F.I.R.No. ***/**, Kanpur Police, UP

साईं प्रसाद समूह पर गैरकानूनी तौर से आम जनता से धनराशि जमा करने के आरोप हैं। साईं प्रसाद समूह आकर्षक रिटर्न व निश्चित अवधि में दुगुनी रकम देने का लालच देकर आम जनता से विभिन्न योजनाओं व तौर-तरीकों से धन जमा करता है, जो कि सरासर अवैध और गैरकानूनी है। इस मामले में उपलब्ध दस्तावेजों से साफ पता चलता है कि साईं प्रसाद समूह बिना आरबीआई और सेबी से इजाजत लिए ही ये निवेश कारोबार कर रहा है। इसके लिए इस कंपनी ने भी कृषि भूमि में निवेश करने और कृषि उपज का कारोबार करने की आड़ ली है।

भारतीय प्रतिभूति और विनिमय बोर्ड (सेबी) ने साईं प्रसाद समूह की सात में से इन दो कंपनियों और उनके मालिकान के खिलाफ दो आदेश पिछले दिनों जारी कर कंपनी की धन जमा करने के अवैध कारोबार पर प्रतिबंध लगाया है। दोनों आदेश सेबी की वेबसाईट पर उपलब्ध हैं। इनकी लिंक नीचे दिए हैं –

साईं प्रसाद प्रापर्टीज लिमिटेड से संबंधित सेबी का आदेश देंखें
http://www.sebi.gov.in/cms/sebi_data/pdffiles/26099_t.pdf
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1374069736895.pdf
साईं प्रसाद फूड्स लिमिटेड से संबंधित सेबी का आदेश देंखें
http://www.sebi.gov.in/cms/sebi_data/pdffiles/26098_t.pdf
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1374069663484.pdf

इससे पहले एक जनहित याचिका की सुनवाई के दौरान मध्यप्रदेश हाईकोर्ट की ग्र्वालियर खंडपीठ ने भी साईंप्रसाद समूह समेत ऐसी ही 32 कंपनियों द्वारा अवैध रूप से निवेश योजनाएं चलाने के मामले में जांच करने के लिए सीबीआई को आदेश दिए थे। इस सीबीआई जांच से साफ हो गया कि सांई प्रसाद समूह भी अवैध रूप से निवेश योजनाएं चलाने और निवेशकों से धन जमा करने के अवैध कारोबार में शामिल है। ग्वालियर हाईकोर्ट ने यह जांच रपट संबधित राज्यों की जांचकर्ता एजंसियों को कानूनी कार्रवाई के लिए भेजने का निर्देश दिया। अफसोस है कि इस छानबीन के नतीजे साफ होने के बावजूद आज तक किसी राज्य सरकार ने मध्यप्रदेश हाईकोर्ट के निर्देश पर कोई कार्रवाई नहीं की। साईं प्रसाद फूड्स लिमिटेड तथा अन्य कंपनियों से संबंधित ग्वालियर खंडपीठ, मध्यप्रदेश हाईकोर्ट का आदेश देखने के लिए नीचे दी लिंक पर जाएं–
http://www.dif.mp.gov.in/hcdecision13072012.pdf

कुल मिला कर रिजर्व बैंक ऑफ इंडिया (आरबीआई), सेबी, सीबीआई और पुलिस जैसी निगरानी एवं जांचकर्ता एजंसियों के अनुसार साईं प्रसाद समूह की कंपनियाँ गैरकानूनी तौर-तरीकों से आम जनता व निवेशकों से अवैध रूप से धन जमा करने के कारोबार में है। ऐसी कंपनियाँ निकट भविष्य में धन लौटाने में विफल हो जाती हैं, जिससे लाखों-करोड़ों निवेशकों को अपनी मेहनत से कमाई पूंजी से हाथ धोना पड़ता है; अत: ऐसी कंपनियों से आम जनता को सावधान रहना चाहिए, यह मत इन जांचकर्ता एजंसियों के अधिकारियों ने व्यक्त किया है।

भवदीय
Mohammed Usman,
President-Forum for Fairness in Democratic System
Cell: 9322273393
(नोट – इस विज्ञप्ति में दिए तथ्यों से संबंधित तमाम दस्तावेजी सबूत आपके द्वारा हमारे प्रतिनिधि से संपर्क करने पर उपलब्ध होंगे।)

CBI busts corporate loan bribery scandal

Exposing a massive bribery scam in corporate loans given out by prominent public sector banks and financial institutions, the CBI on Wednesday arrested the chief executive officer (CEO) of LIC Housing Finance Ltd in Mumbai, a top officer of LIC and officers of Bank of India (BoI), Central Bank of India and Punjab National Bank (PNB).

CBI conducted raids in six major cities, including Delhi and Mumbai. Eight persons were arrested. Officials said this is a case of big- ticket corporate loans being given out by these institutions on payment of huge bribes to their top officials and by- passing mandatory conditions. Over 30 corporates, including some big real estate firms, are under the scanner for obtaining such loans.

It is alleged that some companies got housing loans by faking themselves as individuals and submitting fake documents, which were duly processed by the accused bankers upon payment of bribes. Corporates are not entitled to housing loans.

These are meant only for individuals and come at a lesser interest rate than commercial loans. CBI has named over a dozen such corporates in its FIR, albeit not as accused.

A Mumbai-based private financial services company, Money Matters Group, was acting as the mediator for such loans.

Those arrested are Ramchandran Nair, CEO, LIC Housing Finance Ltd; Naresh K. Chopta, secretary (investment), LIC; R. N. Tayal, general manager, BoI, Mumbai; Maninder Singh Johar, director (chartered accountant), Central Bank of India, New Delhi and Venkoba Gujjal, deputy general manager, PNB, New Delhi, Rajesh Sharma, CMD, Money Matters and two of his employees, Suresh Gattani and Sanjay Sharma.

CBI has accused Nair of showing undue favour to companies like D B Realty, Pashmina Ltd, Mantri Realty, Sigrun Holdings Ltd, Entertainment World and Indore City Treasures. It has also alleged that Rajesh Sharma of Money Matters delivered Rs  45 lakh to Nair last November besides financing the purchase of a flat, at a discounted price, by Nair in Goregaon.

CBI has alleged that Tayal received Rs  25 lakh from Sharma for assistance in a matter connected with Ashapura Minechem. Tayal is also accused of assuring Sharma to associate him in the power project proposals of BGR Energy worth Rs  200 crore and OPG Group worth Rs  300 crore.

CBI has accused Chopta of receiving Rs  16 lakh as kickback for providing inside information about LIC's dealing with companies like Adani, JP Hydro, JSW Power, Religare and Pantaloon.

Johar of Central Bank is accused of accepting Rs  30 lakh for providing undue favour to Lavasa.

Venkoba Gujjal of PNB is accused of taking Rs  20 lakh as bribe for facilitating a loan of Rs  50 crore to a client of Sharma.

The eight arrested were produced before a court from where CBI got their custody for five days. They are now being interrogated by CBI to identify the quantum of bribes paid to them - which CBI believes is between Rs  25 lakh to several crores in each case.

CBI has been reportedly tracking this matter for over a year and now moved in after getting concrete proof.

CBI sources insist it is not a case of unrecoverable loans given by the banks but a plain case of bribery where the top bankers took hefty bribes to speed up loan applications of corporates.
Courtesy: Mail Today
Aman Sharma     
New Delhi   Last Updated: November 25, 2010  | 10:34 IST
http://businesstoday.intoday.in/story/cbi-busts-corporate-loan-bribery-scandal/1/10543.html

Scam around the corner - The enemy within

The fastest expanding business in the Indian accounting fraternity revolves around fraud. Fraud is ballooning so fast in corporate India that audit firms cannot keep pace. The forensic practice of KPMG has some 500 people, doubling over the last two years. At rival Ernst & Young, revenues from the fraud investigation business are expected to double this year and the next, after growing at 50 per cent last year.

As the number of frauds is growing, so is their complexity. Says Arpinder Singh, E&Y's Partner for the service: "If five years ago a typical case would be that of a simple kickback paid to a particular vendor, today it is much more complex, involving data theft, intellectual property issues or complicated bribery cases where tracing money movement can be a challenge."

The sensitivity of companies to such frauds is also increasing. After the Satyam Computer scandal, where Chairman B. Ramalinga Raju cooked the books to report fictitious revenues in excess of Rs 7,000 crore, "tolerance for frauds is veering towards zero in performance-driven companies," says Deepankar Sanwalka, Head of KPMG India's Risk and Compliance Group.

This is a big change from the last decade when the focus at most corporates was on revenue expansion with little thought for controls over the risks that come with unbridled growth. At a given point, KPMG is investigating one or two cases of financial statement fraud with the average size of the transgression being about Rs 50 crore. In fact, Sanwalka believes that, if the slowdown had continued, more Satyam-like skeletons would have tumbled out of India Inc.'s cupboard.

A survey of 200 companies in India by KPMG in August this year indicated that weak support for whistle-blowers, regulations with gaping loopholes, and lax board and senior managements were the main reasons behind a spurt in reported incidents of corporate frauds in recent years. Bribery and corruption were seen as an inevitable aspect of doing business in India. And, while supply chain, bribery and corruption continue to be the most common frauds, intellectual property and electronic crime are emerging concerns, the survey found.

Jamshed J. Irani, Director at Tata Sons, the holding company at the Tata group, believes that the key to foiling corporate fraud is a vigilant board rather than regulations. "We have enough laws in the country to deal with any malpractice," he insists, pointing to a new Companies Act that empowers independent directors.

He says the classic case was that of Tata Finance 10 years ago, where the board got involved and the then chief executive Dilip Pendse, was brought to book and jailed. More recently, last year, a case of accounting misrepresentation was reported at a division of TRF, a company with businesses in automotive undergear and material handling in which the Tata Group holds a 34.30 per cent stake. Irani, who chairs the TRF board, declined to discuss the case because investigation is on. But, those who have tracked the developments say TRF was swift in taking action even though, as a Mumbaibased analyst pointed out, "it was not a case of fraud but of wrong calculation of estimates".

The wrong costs and the consequential revenues recorded in the previous years have been reversed in the current year and the previous year by the company.

The figures were to the tune of about Rs 2.4 crore for the year to March 31, 2010, and Rs 13.32 crore in the previous financial year.

Still, about five senior people of a TRF division have been suspended and asked to go on long leave, pending an inquiry. Perhaps a better choice, some would say, than firing the people and losing control over them. To Irani, the importance of an investigation is its deterrent value and not the actual punishment that can follow. If people know that things will get investigated, that in itself would be a big deterrent.

Deterrence works

Such a deterrent would have worked in an instance that the E&Y team dealt with recently. Some employees of a company had floated their own firms to divert cash from their employer. The losses bloated to Rs 100 crore before they were caught. If TRF is an instance of a proactive board, at HDFC Asset Management Company it was the stock markets regulator that stepped in to seek corrective action. In June, following a case of alleged front running by Nilesh Kapadia, Assistant Vice President for Equities at HDFC AMC, the Securities and Exchange Board of India or SEBI asked the company to overhaul its internal controls and get an inquiry done by the trustees of HDFC Mutual Fund. SEBI also barred Kapadia from trading activities done on behalf of HDFC AMC.

SEBI investigations found that Kapadia had tipped off an associate, Rajiv Ramniklal Sanghvi, before placing the purchase or sell orders for HDFC AMC. Sanghvi, in turn, traded based on such tips, making substantial gains. In his order, K.M. Abraham, a member of SEBI, directed the fund's trustees "to identify whether (Kapadia) had indulged in similar front running activities on other occasions". The trustees had been given six months for the investigation, which means SEBI should be hearing from the company in December.

And it is not just the private sector. Cut to Navi Mumbai. In recent years, a government-owned petroleum products company, Hindustan Petroleum Corp Ltd or HPCL, had to deal with instances of alleged corruption and abuse of official position by some of its employees.

Red flags

Results consistently in line with budget

Unclear costs, often accompanied by failure to perform reconciliations

Profi t and loss items based on judgements rather than hard data

Too many manual journals and accruals without automatic adjustment

Unusual fl uctuations in sales or forward purchase orders, particularly at the year-end

Profits not converted into cash

Undue concern about audit visits

Source: KPMG
Courtesy:
December 26, 2010 /Story

Puja Mehra and E. Kumar Sharma       
Edition: December 26, 2010

http://businesstoday.intoday.in/story/corporate-fraud-in-india/1/11295.html

CBI ‘welcomes’ CVC joining probe of Coal Scam

The Central Bureau of Investigation (CBI) director Ranjit Sinha, who decided against registering FIR in 20 out of the over 250 coal block allocations under scanner, says the agency welcomes the assessment of an external agency — Central Vigilance Commission (CVC) — on its probe’s findings.

Sinha took the decision on grounds that the agency’s probe found no apparent “criminality or criminal intent” (mens rea) in the 20 allocations and gave a “detailed reasoning” on the files, said a senior CBI official. The CBI’s 20 files — one each for the allocations — may be handed to the CVC for scrutiny on Monday as per Supreme Court’s direction on Friday. The court had directed the agency to hand over the files within five days.

On being contacted, Sinha told HT, “The decision to not lodge cases in the 20 coal block allocations was taken as no criminality was found. We respect the court’s order and welcome an external agency’s assessment on our probe that is professional and transparent.”

The SC had on Friday sought the CVC’s assistance to scrutinise the CBI’s decision on the 20 coal block allocations in the wake of divergent views between the agency’s officer supervising the coal scam probe and his senior officials including Sinha on whether cases should be registered. CVC has to file its report to the SC in a sealed cover in four weeks.

Referring to the divergence in views, the official said, “Divergence of views is not unusual for an agency like CBI, which conducts its probes in a professional and scientific manner relying on robust, admissible evidence.” The official said, “Even in cases where a mistake may have occurred, but without any criminal intent, we have to make a distinction.”

“In order to term the CBI decision on the 20 allocations as incorrect, the agency that scrutinises them would have to come up with concrete grounds as well,” he said.

The agency has so far filed 18 FIRs, two of which were recently closed, as part of its coal scam investigation. It has so far filed two charge sheets against two firms that allegedly misrepresented to bag coal block allocations.

BOX
WELCOMING THE MOVE
who decided against registering FIR in 20 out of the over 250 coal block allocations under scanner, says the agency welcomes the assessment of an external agency -- Central Vigilance Commission (CVC) -- on its probe’s findings.

the decision on grounds that the agency’s probe found no apparent “criminality or criminal intent” (mens rea) in the 20 allocations and gave a “detailed reasoning” on the files, said a senior CBI official. The CBI’s 20 files -one each for the allocations -- may be handed to the CVC for scrutiny on Monday as per Supreme Court’s direction on Friday. The court had directed the agency to hand over the files within five days.
Courtesy:
Abhishek Sharan, Hindustan Times  New Delhi, March 30, 2014
First Published: 00:07 IST(30/3/2014) | Last Updated: 00:09 IST(30/3/2014)
http://www.hindustantimes.com/india-news/cbi-welcomes-cvc-joining-probe/article1-1201982.aspx

M-Sat finds Satyam fraud began in 2002

The multi-thousand-crore-rupees accounting fraud at the erstwhile Satyam Computer Services Ltd by its ex- chairman B. Ramalinga Raju dated back to 2002, much further back than earlier thought.

Investigations carried out by Mahindra Satyam (M-Sat), which took over Satyam Computer Services Ltd in April, 2009, revealed this fact.

The investigating team noted that there were certain transactions which were either improperly recorded or remain unrecorded. There was no proper information about fictitious transactions to the tune of Rs 1,122 crore prior to 2002, as a result of which it was shown as net opening balance as on April 1, 2002. It was classified as " unexplained differences suspense account," in the assets and liabilities statement.

The fraud committed by Satyam's founder and ex- chairman B. Ramalinga Raju and his team was exposed in the restated audit report of M- Sat for the years 2008- 09 and 2009- 10, which was approved by the board of directors of the company on Wednesday.

An independent forensic team appointed by the new management had to struggle a lot to unearth the fraud. " It was the most challenging task. The forensic team had to do 100 types of investigations, go through 2,70,000 files running into 30 terabytes, decode the secret data gathered from 300 hard disks seized from the erstwhile promoters, study one billion lines of secret transactions and examine 200 bank accounts to dig out the scam," M- Sat chairman Vineet Nayyar said.

These include fictitious accounts in revenue receipts, interest income, exchange fluctuations, salary, other expenses, bank borrowings and interest, and tax payments. The total extent of fraudulent entries had an impact of Rs 6,800 crore on the profit and loss account of M- Sat.

For instance, the fictitious revenue from April, 2002, to September, 2008, was Rs 5,353 crore, generated by creating 7,500 inflated invoices and circumventing the normal revenue recognition cycle. This was followed by showing fictitious cash collections as collections from customers. In order to substantiate these fictitious collections, forged bank statements and fixed deposit ( FD) receipts were also prepared.

Of the total fictitious revenue shown, about Rs 4,870 crore was translated into fictitious cash and bank balances. Similarly, fictitious interest income recorded from 2002 to 2008 was Rs 899 crore, of which Rs 327 crore was translated into fictitious cash and another Rs 197 crore was recorded as withholding tax on such interest income.

The remaining Rs 375 crore was reflected as accrued interest as on September 30, 2008.

The forensic investigation also exposed the record of Rs 206 crore towards fictitious exchange gains, which resulted in fictitious debtors of Rs 18 crore and balances of Rs 188 crore. It revealed that Raju had knocked away Rs 293 crore as net salary costs, which were not recorded in the books of accounts, resulting in fictitious cash and bank balances of Rs 299 crore.

What is more, during the scam period, Raju and his team had borrowed Rs 720 crore from banks, but there are no loan records. The company had effected unrecorded repayments to the extent of Rs 581 crore. The unrecorded interest expenses in respect of such accounts amounting to Rs 17.5 crore also resulted in fictitious cash and bank balances.

"The promoters showed fictitious tax payments ( advance tax and US federal tax) to the tune of Rs 306 crore. We have also noticed some entries and debits which we are unable to explain as they remain unidentified," Nayyar said.

The investigation has been unable to identity the nature of certain alleged transactions amounting to Rs 1,203 crore against which the firm had received notices from 37 firms.
Courtesy:
Srinivasa Rao 
Hyderabad   
Last Updated: October 4, 2010  | 17:47 IST

http://businesstoday.intoday.in/story/m-sat-finds-satyam-fraud-began-in-2002/1/9290.html

SC: Where has depositors’ money gone?

Saradha report ‘sketchy’

New Delhi, March 4: The Supreme Court today expressed displeasure with the Saradha default probe details submitted by the Bengal government, saying it was “sketchy” and wondering where the money collected from depositors had gone.

The apex court granted 10 days’ time to the state government to file an additional affidavit on the investigation to examine whether it ought to order a CBI probe.

“What you have given is sketchy. Where has the money gone? Because as per the details given by the ED (Enforcement Directorate), they have attached 131 properties worth Rs 35 crore. As per your (state government’s) statement, you have attached some properties. Let us take it is worth another Rs 65 crore,” the bench of Justices T.S. Thakur and C. Nagappan told senior counsel C.S. Vaidyanathan, who is appearing for the government.

“So far, you have been able to account for only Rs 100 crore. But where has the rest of the money gone? We need to know where is the balance amount,” the court added.

“Most of the money, it seems, is collected in cash. (Saradha’s) bank accounts have very little money,” the bench said.

The extent of the deposit default scandal has not been conclusively established yet. During the hearing on February 25, the Supreme Court had said 18 lakh investors had been affected, a figure that appeared to have been based on the number of people who have registered themselves with the state government-appointed Shyamal Sen Commission. All the names are still to be vetted.

There is no consensus on the exact amount defaulted. While a petition has put the figure at Rs 30,000 crore, Vaidyanathan had estimated the amount to be Rs 1,700 crore.

Today, Vaidyanathan told the court that the Saradha Group had spent around Rs 820 crore to pay its agents. According to the senior counsel, 30 per cent of the total amount collected from investors had been spent on paying the agents.

Going through the 417-page report submitted by the government today, the court pointed out that according to it, Rs 50 crore had been spent to promote Saradha’s media business, particularly a TV channel.

“So, even for promoting a channel, you need Rs 50 crore?” the court asked. Senior counsel Harish Salve, who is also appearing for the Bengal government, said channels paid money for “dressing up” their shows and for “consultation fees”.

However, the court was not convinced with the state’s submission and directed it to file a detailed report on the probe. It posted the matter for further hearing on March 26.

Earlier, additional solicitor-general Sidharth Luthra told the bench that in July last year, the CBI had informed the Supreme Court that it was willing to investigate the case if the court so desired.

“If we are to investigate, we will now have to take a re-look at the various cases registered by the state government and plan our strategy. We do not have the manpower, but if the court wants, we are willing to carry out the task because we need to examine various angles and the inter-state ramifications, if any,” Luthra told the bench.

Luthra submitted to the court in sealed covers additional probe reports on behalf of the Serious Fraud Investigation Organisation (SFIO).

The apex court is hearing two PILs — one filed by advocates Pratim Kumar Singha Ray and Abu Abbasuddin, and the other by advocate Subrata Chattoraj — seeking a CBI probe into the Saradha default. The PILs allege that several Trinamul leaders are involved in the default. The Opposition in Bengal has also levelled a similar allegation.

On February 25, the Supreme Court had asked some tough questions to the Bengal government on why it was fighting shy of a CBI probe into the Saradha default scandal.
Courtesy:
OUR LEGAL CORRESPONDENT
http://www.telegraphindia.com/1140305/jsp/bengal/story_18046308.jsp

Online racket busted: 4,500 duped of Rs. 11 cr

The police here on Saturday nabbed a fraudster who had alle gedly duped 4,500 people across the country to the tune of Rs. 11 crore. The accused was active in Chandigarh and its adjoining areas and he had set up his offices also.

The police claimed that he was involved in an online fraud and made Rs. 11 crore within six months by cheating people.

The accused has been identified as Shyam Prasad, a resident of Andhra Pradesh. The police have arrested his three other partners but have not disclosed the names of other gang members.

He had registered a website “Helping us.me”. He had advertised through inter net and allured the people by giving assurances that the money would be doubled within 40 days.

He used to show the doubled amount in some of the accounts. The gang members were trying to misguide the people by claiming that they were able to double the money within 40 days.

By this method, they were able to make 4500 members within India who were deceived. Police officials are taking the assistance of bank officials for tracing the account numbers.

They are also getting assistance from the cyber cell to trace other gang members. The police arrested him on the charges of cheating and various sections of the IT Act.

Courtesy:
Gurpreet Singh Chhina, Hindustan Times  Fategarh Sahib, May 25, 2014
First Published: 10:12 IST(25/5/2014) | Last Updated: 10:14 IST(25/5/2014)
http://www.hindustantimes.com/punjab/patiala/online-racket-busted-4-500-duped-of-rs-11-cr/article1-1222606.aspx

Mumbai: Aarey road 'repaired' for 3rd time in 2 years

Work underway by PWD to fix the rugged road, which is usually repaired only in bits and pieces, and so falls apart in a month or so.

Hoping to gain some brownie points before the upcoming Lok Sabha elections, the public works department (PWD), headed by the Nationalist Congress Party (NCP), has once again started repairing the arterial Aarey Milk Colony Road. The work is expected to be complete before the polling day.

In the last one year the road, which connects Goregaon on the Western Express Highway (WEH) with Powai and Marol, has been patched up twice — before and after the monsoon. But it didn’t take more than a month for it lose shape, because the 8 km stretch is only patched up in spots to begin with, and the shoddy work ensures a bumpy ride for motorists.

When mid-day visited the road on Friday, we saw that the same stretch was being repaired by the PWD. Executive engineer Milan Kamble said, “We started repair work on the road over a week back, and it will be completed in less than one month. We usually do the repairs at the night to avoid interrupting traffic movement.”

Asked why the road needed fixing a third time in one year, he refused to comment. But a senior PWD official, requesting anonymity, said, “The Aarey Milk Colony Road is owned by Aarey Dairy, which, being a government body, gives us the money for repairs.

It requires overhaul time and again because it passes through a small patch of forest that receives heavy rainfall. Every time they give us a limited amount of money, and we can only repair the patches that are in bad shape. The solution to potholes is constructing a cement-concrete (CC) road.”

But the PWD proposal to build the main road of CC was turned down by a cabinet sub-committee on infrastructure in February, as some of the ministers thought it fell under the BMC’s jurisdiction, and the corporation should make the road and stop the toll collection later on.

Concrete plan

• The PWD intended to convert the present tar road to CC and the project was worth R135 crore. 
• The related proposal stated that the main Aarey Colony Road connecting the Western Express Highway at Goregaon end with Powai and Marol would be made of cement-concrete and the internal road of asphalt. 
• At present, R5 is charged for two-wheelers and R15 for light utility vehicles using the road.

Courtesy
By Ranjeet Jadhav | Posted 07-Apr-2014
- See more at: http://www.mid-day.com/articles/mumbai-aarey-road-repaired-for-3rd-time-in-2-years/15211053#sthash.3KBDlD1I.dpuf

ऑनलाइन सर्वे कंपनियों ने पब्लिक के एक हजार करोड़ लूटे : पुलिस को फर्क नहीं

राजधानी में बीते कुछ सालों में दर्जन भर से ज्यादा ऑनलाइन सर्वे कंपनियां पब्लिक के करीब एक हजार करोड़ रुपए समेटकर चंपत हो गईं और पुलिस ने कोई कार्रवाई नहीं की। दिखावे के लिए गिरफ्तारियां हुईं, लेकिन पब्लिक की डूबी रकम दिलाने के लिए कुछ नहीं किया। दर्जनों शिकायतों को पुलिस ने सिर्फ यह कह कर रफा दफा कर दिया कि पब्लिक ने अपनी मर्जी से कंपनियों में रकम फंसाई अब पुलिस क्या करे?

नई दिल्ली में स्पीक एशिया के रामसुमिरन पाल की गिरफ्तारी के बाद बाकी सर्वे कंपनियों के निवेशकों में भी उम्मीद जागी है। साथ ही राजधानी में स्पीक एशिया का कारोबार देखने वाले दस से ज्यादा फ्रेंचाइजी वालों की धड़कनें भी बढ़ गई हैं। क्योंकि कार्रवाई का शिकंजा उन तक भी पहुंच सकता है। 

वर्ष 2010 में स्पीक एशिया को मिल रहे भारी रेस्पॉन्स को देखकर राजधानी में कुकुरमुत्ते की तरह रामसर्वे कंपनी, जीबी एशिया, अलगल्फ, एरोलाइट, यूनी मैक्सल, एविशो पैसिफिक, यूके एड वर्ल्ड समेत एक दर्जन से ज्यादा कंपनियां सामने आईं। भारी-भरकम मुनाफा दिखाकर इन कंपनियों ने निवेशकों को जम कर ठगा।

जिन्होंने शुरुआत में रकम लगाई उनका पैसा निकाल आया लेकिन जिनकी चेन बनाई उनकी रकम डूब गई। जब एक-एक करके कंपनियां भागने लगीं तो लोगों की शिकायतें सामने आने लगीं। गोमतीनगर, नाका, हजरतगंज, कृष्णानगर और आशियाना में हजारों लोगों ने शिकायतें की, मुकदमा सिर्फ हजरतगंज, नाका और कृष्णानगर में ही दर्ज हुए। रिपोर्ट दर्ज करने के बाद भी पुलिस कार्रवाई से कतराती रही।

पुलिस ने किया था खेल

जीबी एशिया के संचालक सिराजुद्दीन अंसारी को बचाने के लिए हजरतगंज पुलिस ने खेल भी किया। लेकिन कोर्ट की फटकार ने पुलिस का पूरा खेल बिगाड़ दिया। जीबी एशिया के मालिक को रिमांड पर लेने के लिए मुंबई और गोवा पुलिस ने भी हजरतगंज पुलिस से संपर्क किया था। उसके खिलाफ वहां भी मामले दर्ज थे। संचालक के हाथ लगने के बाद भी पुलिस पब्लिक की रकम नहीं दिला पाई। न ही पुलिस ने ये जानने का प्रयास किया कि निवेशकों की डूबी रकम का कहां निवेश किया गया।

नाका में एविशो कंपनी के खिलाफ रिपोर्ट दर्ज हुई। पुलिस ने निचले स्तर के तीन लोगों को गिरफ्तार कर लिया। लेकिन उसके मालिक अनिल द्विवेदी को पुलिस आज तक नहीं तलाश पाई या कह सकते हैं कि तलाशने की कोशिश नहीं की। कृष्णानगर और आशियाना के मामले में भी पुलिस का कुछ ऐसा ही रुख रहा।

निवेशकों की डूबी रकम

स्पीक एशिया - करीब 175 करोड़

जीबी एशिया - करीब 100 करोड़

एविशो - करीब 75 करोड़

रामसर्वे- 120 करोड़

साभार

नवभारत टाइम्स | Nov 28, 2013, 03.41AM IST लखनऊ

http://navbharattimes.indiatimes.com/lucknow/crime/police-didnt-do-anything/articleshow/26486439.cms

रऊफ गाइड भी करता था सटोरियों को

पाकिस्तान अंपायर असद रऊफ क्रिकेट मैचों के दौरान सिर्फ सूचनाएं लीक करने का ही काम नहीं करता था, बल्कि वह सटोरियों का सलाहकार भी था।

मुंबई क्राइम ब्रांच के एक अधिकारी ने एनबीटी को यह जानकारी दी। इस अधिकारी के अनुसार, रऊफ अक्सर विंदू दारा सिंह व अन्य सटोरियों को बताता था कि सट्टा ऐसा खेलो कि मामला सेफ रहे। 

कई बार वह यह भी बताता था कि क्या लगाना है और क्या खाना है। उसने काफी मैचों में सट्टा लगाया, पर क्राइम ब्रांच ने चार्जशीट में इस बात का जिक्र नहीं किया है कि उसने सट्टे में कितना कमाया या कितना गंवाया।

क्राइम ब्रांच इस बात की भी पड़ताल कर रही है कि रमेश व्यास की जो लाइनें पाकिस्तान या दुबई में कनेक्टेड थीं, कहीं इनमें से कोई लाइन रऊफ के किसी रिश्तेदार या दोस्त से तो जुड़ी हुई नहीं थी। जिन सटोरियों की लाइनें पाकिस्तान और दुबई से जुड़ी हुई थीं, उनमें एक राकेश गंगवाल उर्फ राकेश जयपुर का भी नाम है।

मुंबई क्राइम ब्रांच ने उसके पास से चार मोबाइल जब्त किए थे। इनमें से दो मोबाइल पाकिस्तान और दुबई से जुड़े हुए थे, जबकि दो नंबर लोकल पंटरों और सटोरियों से बात करने के लिए यूज किए जाते थे। पर राकेश जयपुर के वकील अजय दुबे ने एनबीटी को बताया कि उनके मुवक्किल के चारों ये मोबाइल खुद उनके नाम रजिस्टर्ड थे। ऐसे में मुंबई क्राइम ब्रांच ने राकेश जयपुर के खिलाफ जो चीटिंग का केस दर्ज किया है, वह एकदम गलत है। राकेश जयपुर के खिलाफ सिफ गैंबलिंग का केस ही बनता है।

साभार

Sep 25, 2013, 08.30AM IST, सुनील मेहरोत्रा ।। मुंबई

http://navbharattimes.indiatimes.com/mumbai/crime/rauf-also-used-to-guide/articleshow/23010408.cms