Seeking directions for a thorough probe, capital market regulator Sebi has told the Calcutta High Court that Alchemist Group's chairman K D Singh was allegedly trying to siphon off around USD 100 million from the money deposited by gullible investors to tax havens, including for buying strip clubs and vacation homes abroad.
The Securities and Exchange Board of India (Sebi) today approached a division bench of justices Aniruddha Bose and Joymalyo Bagchi with a plea that it was not legally competent to conduct such a probe and the court should direct competed agencies to investigate the matter.
The regulator alleged that Singh was trying to siphon off investors' deposits worth hundreds of crores of rupees from Alchemist group, which has been under Sebi's scanner for garnering funds from public investors in violation of rules.
In its application, Sebi said that "K D Singh is in the process of siphoning off around USD 100 million, earned by way of duping the innocent public in the guise of fake deposit scheme, in buying companies abroad via tax havens."
It also prayed for an order by the bench directing competent agencies to recover the money from Singh and hand over to a one-man committee as directed by the high court on December 21, 2017.
The bench decided to hear the matter further on August 6.
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Sebi further said that the one-man committee of Justice (retd) S P Talukdar has started making payments to investors from July 2.
The regulator said that Singh was allegedly trying to siphon off the money in association with the business head of a Mumbai-based family owned group with international presence, whose name it would disclose during hearings.
Sebi alleged that Singh, through this business man, has entered into a deal with a Greek business owner whereby a new entity is being created in Cyprus and 10 million euro has been kept in an escrow account till the Greek company's ownership is transferred to Cyprus.
The regulator also alleged that Singh was is in process of buying real estate in Mykonos Island of Greece to construct 'safe' vacation homes and was also acquiring pubs, restaurants and strip clubs in Athens which he is planning to combine with his vacation homes to create a 'private party' club worth 5 million euro.
The Sebi application further stated that shares of a Kolkata-based private company were recently acquired as benami from one minority shareholder and process of acquiring shares of another minority shareholder worth Rs 250 crore is on through a similar route.
"Also, in December, a benami property was sold in India and funds were received in the UAE as an operating income from a customer on fake invoices," Sebi said.
It also said around 10 entities located in various jurisdictions are being used for moving funds around through different banks.
Sebi said it has been informed of all these assets and the nature of their dealings, but "it (the regulator) is neither authorised nor legally competent to make investigation in this regard and also not competent to recover assets as it involves flow of funds abroad and assets in foreign jurisdictions, if the information is correct."
It said that the volume of assets of the company as enumerated is such that the amount if received from it could possibly satisfy the claim of a substantial portion of depositors of the Alchemist Group.
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