Summary Of Article:
1)ED cancels Mohnish Pabrai’s transaction to buy 2.7% stake in KRBL
- The famous value investor Mohnish Pabrai tried to buy a significant stake KRBL from one of the existing investor – BALSHARAF. But ED stopped this transaction saying that BALSHARAF was one of the accused in the VVIP chopper scam and he had purchased this shares from using this crime money.
- Then case filed Delhi high court. High court observed that ED orders to block the sale of KRBL shares was outside the law & BALSHARAF who was distributor of KRBL in Saudi Arabia for a long time had acquired the stake in KRBL in 2003.
- How could BALSHARAF have acquired this stake using “crime money” for a crime which was allegedly committed 5 years late around 2008?
2)KRBL shares tanks 20% after former director Gautam Khaitan arrested in the augusta westland VVIP chopper scam
- In a charge sheet filed by ED in jun-19 its is alleged that Gautam khaitan has been the beneficiary of RS.850 cr of slush funds in various defense funds.
- It is also alleged that by ED that part of the money has been routed through a step-down subsidiary of KRBL based out of Dubai – RAKGT.
- Gautam khaitan was an independent director of KRBL from 2007 to 2013. KRBL management claims that though Gautam khaitan was independent director, we are not aware of his other dealings and KRBL is no way associated with alleged corruption in VVIP chopper scam.
- He was made to resign from the KRBL board.
- At the end, court says that there is (in the same) no longer directly connection between RAKGT and KRBL in India.
3)ED attached KRBL property at Dhuri, Punjab.
- the ED alleged KRBL complicity in the Embraer defense scam case and attached land property worth RS.15 crore situated adjacent to the rice mill in Dhuri, Punjab.
- ED alleged that this was crime money and land worth an equivalent amount was attached by the enforcement directorate.
4)IT tax demand notice
- KRBL board declared that the IT department had raised demand of RS.1270 cr. The IT disallowed expense of RS.2,221 crore which of RS.1,996 crore expense from paddy purchases made from farmers between the years 2010 & 2017.
- KRBL said that the paddy purchases from farmers dis-allowed as expense by the IT dept were actually cash purchase from UP farmers. Before JanDhan accounts became universal around 2015/16.
5)Resolution of IT case
- The tax demand notice of RS.1270 crore was reduced to RS.101 crore.
- Fast forward 12 months and the stand of KRBL management was vindicated on appeal.
- However, in VVIP chopper scam nothing has been proved, but investigation of 7 years and no charge sheet filed against KRBL or its directors.
Note:-This is combined work of me and my colleague Javvad Vakharwala