The First Information Report was filed under Section 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) against three directors -- Prashant Mulekar, Kiran Kulkarni and Pankaj Kumar and a tax consultant Dinesh Jajodia.
The Economic Offence Wing (EOW) has registered a case of cheating against the directors of Geodesic Ltd for allegedly siphoning off Rs 1,062 crore they raised between 2008 and 2010 by floating foreign currency convertible bonds (FCCBs). The directors were arrested and produced before the magistrate court on January 18, which remanded them to police custody till January 25.
The First Information Report was filed under Section 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) against three directors -- Prashant Mulekar, Kiran Kulkarni and Pankaj Kumar and a tax consultant Dinesh Jajodia.
In an affidavit in the Bombay High Court, joint commissioner of police (EOW) Dhananjay Kamlakar, said, "Prima facie it is 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 Foreign Currency Convertible Bonds (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 malafide intention."
Advocate G W Mattos who filed the affidavit in the Bombay High Court said, "The EOW is able to find out the siphoned off amount showing bogus purchases of software which were never ever brought." The affidavit will be presented to the high court on January 25, informing about the status report on the case.
The EOW was in August last year directed by the high court to look into the matter after Securities and Exchange Board of India informed the court that company had failed to furnish details pertaining to the utilisation of the proceeds of the FCCBs. Based on this the court directed the EOW to inquire into this case and ascertain whether prima facie case is made out.
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 subsidaries 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.
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