Economic Offenses Wing files charge sheet against Yash Birla for cheating investors

The Economic Offenses Wing (EOW) has filed a charge sheet against Yash Birla and and seven others for allegedly cheating investors. Two years ago, an FIR was registered against the Yash Birlaled Birla Power Solutions Ltd (BPSL) and its CFO PVR Murthy in connection with a scam running into several crores, timesofindia.com.

The charge sheet, filed in several thousand pages, was filed in the special Maharashtra Protection of Interest of Depositors (MPID) Act court on Thursday.

The charge sheet also has the names of YP Trivedi (senior Supreme Court lawyer, former Rajya Sabha MP and director of finance) Ashish Mahindakar (signing authority), Tushar Dey (legal head of the group), MS Arora (director), Anant Vardhan and Upkar Singh Trivedi.

They have been charged under sectors 406 (criminal breach of trust) r/w 420 (cheating) and Section of the MPID Act. The complaint about Yash Birla is that as main chairman of the group, he was responsible for repaying investors.

A notification issued on March 19 by the home department, for attachment of Birla’s properties, says that several complaints have been received stating that ‘funds were collected by Birla Power Solutions and that they have defaulted to return the deposits made by the depositors on demand’. And also that properties have allegedly been acquired by the financial establishment and its chairman and directors from the deposits collected.

“Whereas the state government is satisfied that the said financial establishment and its chairman or directors are not likely to return the deposits to the depositors and hence the government has to protect the interest of the depositors… the Maharashtra government hereby attaches the properties of the said financial establishment …” the notification reads.

Objections filed by Advocate Ramakant Gaur against final attachment of the property are pending before the court. One of the properties, a 4,000 sq meter yard plot at Oshiwara, will be auctioned by the competent authority and the money will be disbursed to the investors.

In August, an auditor was appointed to get an estimate of the total number of investors and fixed deposit holders, which easily runs into over 10,000. He was supposed to submit the list of total investors that have been paid and the ones that still need to paid. The report, although submitted, is sealed.

The case against the company was filed in December 2013 for not refunding depositors’ money accepted between August 2009 and December 2013. The Managing Director of BPSL and Chief Finance Officer of the group PVR Murthy was arrested on January 30, 2014.

In a 5,000-page charge sheet filed in March last year, the EOW had attached damning statements of the company’s auditors, a close aid of Murthy, and several investors who were cheated of their money. Murthy’s close aide, who was made to handle the company’s illicit cash transactions, told investigators that he quit his job in March 2013, as he was overwhelmed by the amount of cash he was being routinely asked to manage.
It is alleged that Yash Birla-led BPSL accepted cash deposits and offered up to 42 per cent annual interest to lure unsuspecting investors.
The acceptance of cash deposits was red-flagged by the company’s auditor from 2009 to 2010, chartered accountant Venkatesh Subramanium of Dalal and Shah too. The auditor, in fact, had told Murthy and other top officials that the company was flouting almost every single provision of the Companies Act, 1956 by accepting deposits without issuing advertisements in newspapers, clearly stating the terms and conditions, including the rate of interest offered.
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