ED files chargesheet: Sharp Long director Dinesh Jajodia defrauded shareholders

“The accused have been chargesheeted under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA) and the prosecution complaint was filed against the four arrested accused and eight firms on Friday,” said a senior official. The agency claims that the accused mobilised foreign funds through FCCB but failed to repay the amount to the London-based bank that acted as the trustee. Jajodia was the director and authorised signatory of various overseas companies located in the UAE, Hong Kong and British Virgin Islands. In its prosecution complaint reviewed by The Indian Express, the ED claimed, “Jajodia hatched a criminal conspiracy to defraud the shareholders as well as FCCB holders (overseas investors) by creating a web of shell companies in various countries through fictitious dealings in order to receive wrongful gains.”

According to a senior official, the chargesheet states that the accused caused “wrongful gain for themselves and wrongful loss to shareholders and FCCB holders of M/s Geodesic Limited (GL), siphoned off shareholders’ funds to the tune of Rs 250 crore by showing bogus purchases of software and failed to redeem Foreign Currency Convertible Bonds worth US$ 125 million (approx Rs 812 crore) to FCCB holders by creating a web of shell companies in various countries with the malafide intention of siphoning off the money”.

The utilisation of the funds was shown as investment in foreign subsidiaries or new overseas acquisitions. US $125 million was raised through these foreign bonds, first credited in the overseas account (Citibank London) of GL and subsequently transferred directly to the account of its overseas subsidiaries such as Geodesic Holdings Limited, Mauritius and Geodesic Technology Solutions Limited (GTSl), Hong Kong. “On maturity, Geodesic Ltd had failed to adhere to the commitment given to Citibank, London, for repayment of the amount totalling USD 157.06 million,” it said.

The source said Sharp Long was one of the offshore companies to whom a loan appears to have been extended by Enterprise Emerging Markets Fund (EEMF) in which GTSL is claimed to have invested money.