The sudden demise of Vasan Eye Care promoter A M Arun in Chennai on Monday of reported cardiac arrest will not impact the case of forex violations against him and the company, sources in the Enforcement Directorate (ED) said.
Arun and Vasan are being probed for violations of the Foreign Exchange Management Act (FEMA). “The law is clear that the liability shifts to the heir in case the accused promoter of a company under probe dies. In any case there are multiple accused in the case including Arun’s family members,” an ED official said. Among those named in the cases are Arun’s wife and his father-in-law Dwarakanathan.
In April 2017, the ED had slapped separate showcause notices against Vasan Healthcare Pvt Ltd and Karti P Chidambaram, the son of former finance minister P Chidambaram, in connection with the case. While Vasan got a showcause notice of Rs 2,262 crore, Karti and a company once allegedly associated with him got notice for Rs 45 crore.
Sources said the case is currently pending at the adjudication level.
The ED has linked the violations to infusion of foreign investment into the eye care chain through venture capital firms such as Sequoia Capital and Westbridge Capital. It has raised questions as to why shares were not bought directly from the company but through Arun, and why the companies bought overpriced shares from Advantage Strategic Consulting Pvt Ltd, adding that its “activities are found to be in the control of Shri Karti P Chidambaram”.
However, Karti responded saying: “Till date I have not received any showcause notice from ED in this case.”
In its statement, the ED had said, “… the overseas investors instead of acquiring equity shares from the company directly, which would have added more liquidity to the company, chose to acquire the same in the secondary market viz., from the existing share holders of the company including its promoter Shri AM Arun, M/s AMA Associates (a partnership firm belonging to the promoter Shri AM Arun and his father in law Shri Dwarakanathan) and M/s Advantage Strategic Consulting Pvt Limited”.
The total amount invested by the overseas investors, which ultimately benefited the existing shareholders, was Rs 357.72 crore, the ED had said.
“Mrs Arun, promoter of M/s Vasan who was allotted equity shares of face value of Rs 100 each on payment of premium of Rs 100, transferred 3,00,000 equity shares to her father Shri Dwarakanathan without receiving any consideration. Shri Arun immediately organized the transfer of 1,50,000 shares from Dwarakanathan to M/s Advantage Strategic Consulting P Limited, who were never connected to the activities of the company till that date. Although the shares had a total face value of Rs 1.50 Crores and (were) acquired by the original allottee for Rs 3 Crores… M/s Advantage Strategic Consulting P Limited, paid to the transferor Shri Dwarakanathan Rs 50 lakhs only,” the ED statement had said.
Vasan and Arun’s name had also come up during ED investigations into the Aircel-Maxis case, in which Karti is accused of moneylaundering.
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