In August last year, the Bombay High Court had directed the Economic Offences Wing (EOW) of Mumbai police to look into the matter after Securities and Exchange Board of India (Sebi) had informed the court that the company had failed to furnish details pertaining to the utilisation of the proceeds of the FCCBs.
The Enforcement Directorate (ED) officials have attached three flats worth Rs 3.18 crore of Prashant Mulekar, director of Mumbai-based Geodesic Limited which was embroiled in a foreign currency convertible bonds (FCCBs) default case.
In August last year, the Bombay High Court had directed the Economic Offences Wing (EOW) of Mumbai police to look into the matter after Securities and Exchange Board of India (Sebi) had informed the court that the company had failed to furnish details pertaining to the utilisation of the proceeds of the FCCBs. Based on this, the court had directed the EOW to inquire into this case and ascertain whether prima facie case could be made out.
Later, the EOW had filed a First Information Report (FIR) against the three directors Prashant Mulekar, Kiran Kulkarni and Pankaj Kumar and a tax consultant Dinesh Jajodia under sections 409 (criminal breach of trust by public servant, or by banker, merchant or agent), Sec 420 (cheating) Sec 477 (A) (falsification of accounts), 120 (b) (criminal conspiracy) of the Indian Penal Code.
"It was alleged that the company was involved in siphoning off Rs 1,062 crore they raised between 2008 and 2010 by floating FCCBs. The directors were arrested in the case in January, this year. Prima facie it was evident that the three directors of the company hatched a criminal conspiracy to cause wrongful gain for themselves and wrongful loss to the shareholders and FCCB holders, siphoned off funds of the shareholders to the tune of Rs 250 crore by showing bogus purchases of software and failed to redeem FCCBs by creating a web of shell companies in various countries with the mala fide intention," said an EOW officer.
As per the EOW, the company directors used the stock market mechanism to raise its net worth with a view to raise funds from the public. The share price was rigged a number of times within three years.
In 2008, it raised the FCCBs for investment in its foreign subsidiaries and for overseas acquisitions. The proceeds were used to acquire shell companies based in tax haven countries and these were not reputed in software business. The main object was to siphon off the funds, the EOW alleged. The FCCB were to mature in 2013, police said.
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