Income-tax officials said here today that they were bewildered by newspaper reports that said that the department's searches of the Nirma group's premises had unearthed evidence of the group's links with the Ketan Parekh group. A top official of the I-T department's investigation wing told Business Standard, "Even we are perplexed to read this report in the newspaper."
Nirma, meanwhile, said that the group had made no attempt to camouflage the source and destination of any money or funds as alleged. Nirma Ltd executive director Kalpesh Patel said that all transactions were recorded in the respective books of accounts.
In a press statement, the company said that Nirma Ltd had not invested in equity. But private family trusts in which Karsanbhai K Patel, his family members and other persons are beneficiaries have portfolio investments exceeding Rs 700 crore.
"The private family trusts have been in existence for many years and these trusts have been regularly assessed by the respective tax authorities. As part of their normal investment and financial activities these trusts deal with various broking firms and the firm associated with Ketan Parekh is just one such firm," the statement said.
"The aggregate loss incurred in the investment transactions through the broking firm where KP is associated has been about Rs 2 crore and Nirma has not received any interest-free deposits from it, as alleged," it added.
Expressing ignorance of the composition and break-up of Rs 520 crore referred to in media reports, the company said that during the search the source, transfer and route of all funds transferred during the period February-March 2000 were explained to the tax authorities. The transfer of funds during this period between Mumbai and Ahmedabad included realisation by the private family trusts and other corporate entities in Mumbai of the sale proceeds of secured premium notes (debentures) of Nirma Ltd, it revealed.
"The transfer of the proceeds from Mumbai to Ahmedabad was done through Credit Lyonnais and The Kalupur Commercial Cooperative Bank with the sole objective of ensuring timely transfer of sale proceeds through a cost-effective and efficient channel. All the transactions are recorded in the respective books of accounts and there is no question of camouflaging the source and destination of this money as alleged in the press report," the company reiterated.
Nirma Ltd along with Nirma Chemical Works Ltd, Nirma Industries Ltd and Nirma Credit & Capital Ltd have so far invested $490,300 in Kirsna Global Trade Ltd, Mauritius, with the approval of the Reserve bank of India, the statement said.
Kirsna Global had in turn invested $ 471,600 in Nirma Bangladesh Ltd, a company incorporated in Bangladesh to promote soaps and detergents operations in that country, it revealed.
Emphasising that the foreign exchange transactions in US dollars are settled between two banks according to their normal practice, through their respective nostro accounts maintained in the US, the company said that none of the Nirma entities had any bank account in the US.
"Apart from Bangladesh and Mauritius, Nirma does not have business interests in any other country," it added.
Share transactions among the private family trusts and other entities are duly accounted for and are also reported in the tax returns from time to time. Nirma has never indulged in any sales tax evasion or in unaccounted purchases as alleged in the press reports, the company emphasised.
