NCLT Kochi bench orders MCA probe into Rajya Sabha MP PV Abdul Wahab-led Maruti Suzuki dealer Indus Motors

“Upon careful consideration of the facts and circumstances on record, it is evident that acts of oppression and mismanagement have occurred within Respondent No. 1 Company (Indus Motors). Considering the seriousness of the allegations, the additional reliefs sought by the Petitioners shall be considered following the outcome of a comprehensive investigation to be conducted by the Central Government under the relevant provisions of the Companies Act, 2013,” the tribunal stated in an order dated September 3 (Wednesday).

“…this Bench directs the Ministry of Corporate Affairs to initiate a thorough investigation into the affairs of Respondent No. 1 Company by appointing competent and duly qualified Inspectors for this purpose, covering the period since the financial year 2011–12. If the Ministry of Corporate Affairs deems it appropriate, it may alternatively and simultaneously proceed under Section 212 of the Companies Act, 2013, and appoint any other competent investigative authority as it considers fit for conducting the investigation,” the NCLT said in the order.

The NCLT was hearing a petition filed in 2020 by four minority shareholders of Indus Motors—TP Anilkumar, TP Ajithkumar, TP Sarada, and Anju Madhav—who cumulatively hold 20 per cent stake in the company. They had accused Wahab, who serves as the company’s managing director and holds 59 per cent stake in it, and some of his relatives of misuse of company resources and abuse of position to benefit themselves, and to the detriment of minority shareholders’ interest. The 75-year-old Wahab is a member of the Indian Union Muslim League and is counted among the richest MPs from Kerala. On their part, Wahab and his relatives have denied any wrongdoing.

The petitioners’ allegations included misutilisation of Indus Motors’s funds as the company invested Rs 9.98 crore in the initial public offering (IPO) of Aster DM Healthcare, and later booked a loss of Rs 2.37 crore on the investment. They alleged that the investment was made despite concerns about overvaluation and other issues with Aster DM as Wahab and his family held stake in that company, and Wahab was a close friend of the Aster DM promoter Azad Moopen.

In its latest order in the case, the NCLT said that it was inclined to view Indus Motors’s investment in the Aster DM IPO as “a clear ultra vires act, and not merely a business decision”. The tribunal also ordered Wahab and his family members that are party to the case to refund the loss of Rs 2.37 crore to Indus Motors along with interest at the rate of 12 per cent.

Among other directions issued against the respondents in the case, the tribunal also held that Wahab continued to serve as the managing director of the company despite having crossed the statutory age limit of 70 years in 2020, and ordered that all types of remuneration paid to him since he turned 70 to be refunded to the company, along with interest at the rate of 6 per cent per annum. The NCLT also issued similar directions for two other disqualified directors of Indus Motors.

The petitioners had also alleged that Indus Motors gave over Rs 52 crore in interest-free loans to Wahab and his relatives without proper approvals, and illegal related party transactions worth over Rs 82 crore were carried out in seven years. They had also alleged that properties purchased using company resources were registered in the names of Wahab’s relatives and leased back to Indus Motors at super-normal rents. They had also argued that the company trademark was licensed to related parties without proper approval or royalty.