Bombay HC sets up SIT to probe Rs 3000 crore fraud allegations against Jai Corp’s Anand Jain, slams EOW, CBI’s reluctance

Seeking preliminary probe, Sequeira’s complaints alleged fraud by Jain through various means, including misappropriation of public monies for personal enrichment, defrauding of investors, round tripping of funds through shell companies based in tax havens, making unsecured advances to subsidiaries to launder public money and creation of dubious and  fictitious invoices among others.

Senior advocate Aabad Ponda submitted that in 2021, his client learnt that the Securities and Exchange Board of India (SEBI) had imposed Rs. 20 crore and 10 crore fines on two companies— Mumbai SEZ Ltd and Navi Mumbai SEZ pvt Ltd, in which Jain was the chairman, for fraudulent futures trading in stocks of Reliance Petrochemicals Ltd (RPL).

After conducting in-depth analysis, Sequeira filed complaints before EOW, which were instead forwarded to the SEBI. Aggrieved by the same, he approached the high court.

“We have no words to demonstrate the conduct of the investigating agencies viz: EOW as well as CBI. We may say we are disappointed. We feel that there will be no fair and impartial investigation into the alleged crimes either by the EOW or by the Superintendent of Police, CBI, EOW and hence, a special team needs to be constituted by the zonal director of CBI to ensure efficient investigation into the offences of such magnitude. The need to instill confidence in the investigations and consequently, in the administration of justice, is of utmost concern. The case in question has national and international ramifications,” the HC observed.

The court noted that the “the crimes affecting entire society cannot be ignored,” therefore the constitution of SIT was required to “strengthen faith and strengthen confidence” of the people in the law enforcing agency and justice system, else same “would be shaken.”

Among other allegations, Sequeira  claimed that a total of Rs. 1060 crore was yet to be paid in June, 2021, to investors of Urban Infrastructure Opportunities Fund (UIOF),  a scheme launched by Urban Infrastructure Venture Capital Fund (UIVCF)- a firm wholly owned and controlled by Jain. Moreover, he claimed that Jain had diverted loans from India availed by Navi Mumbai SEZ to Mauritius and Sharjah (UAE) by funneling them into his subsidiaries abroad.

On November 7, 2024, the Economic Offences Wing (EOW) of the Mumbai Police forwarded the petitioner’s complaint to the joint director of CBI . However, the court noted, later this month, ‘shockingly’ the Superintendent of Police, CBI, Mumbai expressed inability to conduct the probe stating that allegations pertained to the purview of the Enforcement Department and the SEBI.

The bench observed that “both the EOW and CBI, for the reasons best known to them, are reluctant to investigate complaints of large scale alleged misappropriation of public funds.”

The court added that it cannot remain a ‘mute spectator’ when it was apparent that “agencies are passing the buck from each other.”

Directing the Joint Director of CBI Mumbai (Anti Corruption Bureau) to supervise the SIT probe, the court remarked, “the justice system will acquire credibility only when people at large will be convinced that the justice is based on the foundation of truth,” if the probe is carried out in fair, impartial and unbiased manner.”