New Delhi: The Serious Fraud Investigation Office (SFIO) has told the Supreme Court that loans close to Rs 22,000 crore involving Amtek Auto Limited (AAL) and its group companies, are under its scanner. The apex court has sought a status report in the matter.
The SFIO, in an affidavit, said: “That the investigation has revealed that all four CUIs (companies under investigation) have taken loans from various public sector banks and private banks. The total loans taken by CUIs as on date are as follows: (i) Amtek Auto -Rs 10,355 crore, (ii) Castex Technologies – Rs 8,427 crore, (iii) Metalyst Forgings Ltd. – Rs 1,630 crore, (iv) ARGL Ltd. Rs 1,509 crore. This makes the total amount of loans taken by the four CUIs combined to more than Rs 20,000 crore according to what the ongoing investigation has revealed up to now.” Metalyst Forging Ltd. ARGL Ltd, and Castex Technologies Ltd are group companies of AAL.
The SFIO said as per the investigation conducted till now, it is submitted that till date 398 related parties have been identified, which may increase to 500.
The SFIO said on the basis of the presentation and the material placed before it by the RP, the Ministry of Corporate Affairs formed an opinion to order investigation into the affairs of Castex Technologies Ltd. vide its order dated September 23, 2019, and against the Amtek Auto Ltd, Metalyst Forging Ltd and ARGL Ltd. vide order dated April 22, 2020 under Section 212(1)(c) of the Companies Act, 2013 by SFIO.
It further added that the resolution professional (RP) also made a presentation to the Ministry of Corporate Affairs on the avoidance transactions executed by Amtek Auto Ltd, Castex Technologies Ltd, ARGL Limited and Metalyst Forgings Ltd. aggregating to Rs. 2320.45 Crore, 4509.59 Crore, Rs. 3454 Crore and Rs.3354 Crore respectively.
“It was observed by the RP that the companies had – (A) given loans and advances to related parties, (B) transferred debit balances to capital work in progress, (C) manipulated the books and executed other fraudulent transactions with related parties at the cost of stakeholders”, said the affidavit.
The SFIO said pursuant to the commencement of investigation, a total of nine look out circulars (LOCs) have been opened against the promoters and associates of AAL which has the effect of preventing them from leaving the country.
The SFIO said a petition under Section 241 and Section 242 of the Companies Act, 2013 for disgorgement of assets of the directors and promoters of AAL and three other group companies has already been filed before the competent tribunal having jurisdiction.
“It is submitted that the examination of as many as 25 persons have been completed which includes key managerial personnel (KMP), directors and promoters of companies under investigation (CUIS)”, it said.
The SFIO said it has already sent the Egmont reference (International Financial Intelligence Cooperation Instruments) to 17 jurisdictions to trace the fund outside the jurisdiction. “The EGMONT Group is an association of various Financial Intelligence Units (FIUS) of various countries. The Egmont Group provides FIUS with a platform to securely exchange expertise and financial intelligence to combat money laundering, terrorist financing, and associated predicate crimes”, said the SFIO.
In a separate affidavit, the CBI has told the Supreme Court that IDBI Bank has declared the former promoters/ directors of Amtek Auto Ltd. as “fraud” on September 26, 2022 and reported it to RBI on October 4, and it is in process of filing a complaint against them, however the company has not been declared as fraud.
The CBI said it has approached 19 banks/financial institutions, out of which IDBI Bank, Bank of Maharashtra, PNB, SBI and IFCI Ltd. have responded to the query of CBI furnishing the status of declaration of the account as fraud and regarding filing of complaints with CBI in case the account is declared as fraud. “Out of the aforesaid five banks, only IDBI Bank has submitted that it has declared the promoters/directors of Amtek Auto Lt as fraud on October 4 with RBI, however, it has not declared the company as fraud,” said the CBI.
The CBI has asked the bank to revert with essential facts in its complaint for the agency to be able to register an FIR.
On September 5 this year, the Supreme Court issued notice on a plea claiming glaring inaction by central agencies — CBI, ED, and SFIO — into the alleged criminal theft and money laundering of the 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.
Speaking with IANS, Jai Anant Dehadrai, the petitioner’s counsel, said: “Amtek auto and its group companies, owned and controlled by the same set of promoters, took loans in excess of Rs 20,000 crore from public and private banks. Then they defaulted on those loans just as dramatically. This is not simply a case of a company going bust. The affidavits filed before the Supreme Court by the SFIO and the CBI indicate a well-planned criminal conspiracy to defraud banks by pumping funds out of these 4 companies into hundreds of shell companies”.
He added that the Supreme Court has asked the agencies, on the last date of hearing on November 3, to file a detailed status report in six weeks indicating the progress in their investigation. The apex court has scheduled the matter for further hearing on December 13.