Alleging that promoters Orissa Sponge have diverted the company funds, one of its three suitors, Bhushan Energy, has moved the Company Law Board (CLB).
Confirming the move, Bhushan Group Managing Director Neeraj Singhal said the promoters of Orissa Sponge have been diverting the company's funds to its promoter firms for buying shares and warrants of Orissa Sponge amid the ongoing takeover tussle.
"We have filed a petition with the CLB, charging Orissa Sponge promoters of diverting the company's funds to promoter firms for buying shares and warrants of Orissa Sponge," Singhal told PTI.
Admitting the petition, the CLB has issued notices to all respondents, including P K Mohanty, the promoter of Orissa Sponge, and directed them to reply in two weeks.
Rubbishing the allegations, Mohanty told PTI that "it is completely unture".
"There has been no fund diversion. We have got bank statements with us," he said.
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Even as Mohanty rubbished the charges, market sources smell a rat and expect the fund diversion to the tune of Rs 100 crore.
Bhushan Energy, Monnet Ispat and Bhushan Power and Steel have been vying to pick up stakes in Orissa Sponge for which they have come out with open offers.