The Enforcement Directorate (ED) wants to examine the chief financial officers or accountants of Rendezvous Sports World Pvt Ltd, owner of Kochi Tuskers that played in the 2011 IPL, a listed firm PG Foils Ltd, Essel Shyam Technologies P Ltd and a few other companies under the Prevention of Money Laundering Act (PMLA) in connection with an alleged Rs 220-crore fraud perpetrated by a top official of Mumbai-based Showman Group at Dena Bank.
According to sources familiar with the case, the agency has found that Vimal Barot, senior vice-president of Showman Group, who is currently in jail, allegedly got seven firms to invest in fixed deposits with a Mumbai branch of Dena Bank.
It is alleged that Barot in connivance with the bank manager, later opened an overdraft (loan) account in the names of these fixed deposit holders, borrowed money against the deposits and siphoned off Rs 220 crore from the bank. The fraud was detected when the fixed deposit holders contacted the bank with the deposit certificates that turned out to be fake. The case was transferred to the CBI, which filed its chargesheet in 2015. The ED, simultaneously began its probe into the case under the stringent PMLA.
Sources said the agency has tracked the “proceeds of crime” and found that Barot allegedly transferred the ill-gotten money into the accounts of over half a dozen organisations, including Rendezvous, PG Foils and Essel Shyam Technologies. In certain cases, Barot allegedly opened bank accounts in the name of some of these organisations without their knowledge, using forged documents, said sources.
The ED, sources said, found that Barot invested over Rs 6 crore in Kochi Tuskers in 2015. Apart from this, he has transferred Rs 9 crore and Rs 7 crore in the accounts of PG Foils and Tulsidas Gopalji Trust, respectively. “The probe agency wants to examine the CFOs of these organisations to gather evidence and identify the properties purchased through the proceeds of crime,” said sources. “The probe has found that deposits at other public sector banks were diverted by Barot in the same way,” said sources.
Dena Bank did not respond to emails and phone calls by The Indian Express seeking comment on the alleged fraud.
A spokesperson of Rendezvous Sports World stated in an emailed response to The Indian Express that the firm signed an official agreement with UVI Film Production Pvt Ltd, controlled by Barot’s wife, for equity investment. Subsequently, the sports firm also inducted the directors of UVI Film on its board, the spokesperson said.
“…an amount of Rs 6.1 crore has been received through RTGS in the company’s bank account from Dena Bank. Since it was through the RTGS mode, it made it impossible to understand that they had cheated the company,” said the spokesperson.
The spokesperson said that once Rendezvous Sports came to know about the alleged fraud, it filed a complaint with police, cancelled the contract, removed the UVI Film officials from its board and returned the money to Barot through RTGS.
“We have explained about the events/consequences happened with us. We would like to further add our anguish that how we have been cheated by a group of people. This deeply affected our opportunities as we have not been able to raise funds as well as bank guarantee required by the company,” said the spokesperson.
Kochi Tuskers played one season of the IPL in 2011 before being terminated from the T20 league by the BCCI for alleged breach of terms. They are seeking to re-enter the tournament after an arbitration went in their favour.
When contacted, PG Foils said it was a “victim of fraud” allegedly committed by Barot. The company said it filed an FIR with the Economic Offences Wing (EOW) in July 2014 as it lost “hard-earned” money in the alleged fraud. The company said Barot alongwith certain bank officials have given it fake deposit receipts against their genuine fixed deposits and diverted their deposits.
“After investigation by the EOW, we came to know that Barot has opened overdraft accounts in the Dhanlaxmi Bank Ltd and Indian Bank against pledge of our original FDRs (fixed deposit receipts) by creating fake and false documents, instruments, letters, letter heads and seals of PG Group companies and Trust… The funds from the overdraft accounts were transferred to various accounts of Showman group companies, associated persons and Companies maintained by Vimal Barot,” the company said in an emailed statement.
Essel Shyam Technologies and Tulsidas Gopalji Trust did not respond to emailed questionnaires from The Indian Express.