Court issues summons to Kerkar, 2 others

The magistrate noted in hisorder "the allegations and facts placed before the court disclose offences punishable under sections 409, 467, 471, 477 (a) read with 109 IPC. Hence by taking cognizance of the offences, process is issued against the three accused which is returnable on July 20".

The complainant companies alleged that the accused had introduced a broking firm without the knowledge of IHCL board of directors in a transaction involving ITDC shares between them and IHCL only to divert their funds.

The complaint alleged that Rs 1.35 crore, which should have accrued to the associate companies of IHCL by way of profit for holding ITDC shares for 13 months before selling them to IHCL, had been diverted to broking firm Richline Leasing and Finance Pvt Ltd (RLF).

This alleged diversion to RLF, the complaint said, was unauthorised and against the decision taken at an IHCL board meeting on June 21, 1996, to the effect that no brokerage would be involved in the transaction. Minutes of the board meeting placed before the courtrevealed that the board had approved the purchase of ITDC shares at a price of Rs 97 each which included a profit margin of Rs 2.5 a share to be paid to each of the associate companies of IHCL for holding the shares.

The complaint further said, "The very nature, constitution, infrastructure and activities of RLF indicated that it was used as a vehicle for dishonest misappropriation by Kerkar of the funds of the associate companies of IHCL."While the IHCL board meeting approved the purchase of ITDC shares from associated companies on June 21, 1996, the books of accounts of Piem Holdings Ltd and Piem Investment and Finance showed that the shares were sold on March 23, 1996.

The accounts of Taj Holdings Ltd and Taj Trade and Investments Ltd did not indicate any sale to Richline Leasing and Finance but showed a sale to IHCL on March 31, 1996, even though the board had actually approved the purchase on June 21, 1996.