Investors seek SFIO probe into Asian Consolidated scam

In a letter to the ministry, the association has alleged that Asian Consolidated Industries made a public-cum-rights issue of Rs 115.47 crore for setting up a project for manufacturing beer/soft drink cans but did not set up the project and after seven years of the public-cum-rights issue, went into liquidation proceedings.

The company is not even traded on the stock exchanges now. The Bombay Stock Exchange delisted the company after it defaulted on payment of listing fee.

Asian Consolidated is promoted by the Asian group of Delhi-based Jain family. The same group also promoted Rajasthan Breweries with a single brewery in Rajasthan which also raised funds from small investors and IDBI. The promoters of the Asian group were Rakesh Jain, Sanjay Jain and Alok Jain.

Rajasthan Breweries also raised money from the public but stopped functioning several years ago. This scrip is also not traded on the stock exchanges. “Investors who put money in these companies had to write off their investment,” said a market analyst.

“We need not stress the adverse impact such loot has on the investors’ perception, morale and the system in particular, and, on the economy as a whole,” the Midas Touch letter to Ministry of Company Affairs says.

Asian Consolidated and Rajasthan Breweries are part of the ‘vanishing companies’ scandal that surfaced between 1992 and 1996 when around 3,911 companies raised Rs 25,000 crore in the primary capital markets and then simply disappeared. Till date very few companies or its promoters have been punished. Rajasthan Breweries was featured in the ‘Loot & Scoot’ scam in The Indian Express which highlighted how small investors were taken for a ride by unscrupulous promoters.

Asian Consolidated promised to set up a project to make 500 million aluminium beverage cans a year, but never set up the unit. The company was wound up. The Asian group, by the way, also set up a factory to produce beer, and raised funds separately to make the seals for the top of beverage cans — that firm was called Asian Tops. “We discussed about this company with the officials of the ministry during our discussion on the action taken on vanishing companies,” says Virendra Jain, Secretary of Midas Touch Investors Assn.

SFIO is also investigating fund diversion and mismanagement of several companies like Daewoo India, Vatsa and Sun Earth.

Loot & Scoot

Money raised from the public: Rs 114 cr
Promoters: Delhi-based Jains (Asian group)
Stock status: Delisted from BSE

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