Examining violations by Indiabulls Group: Centre

The Ministry of Corporate Affairs (MCA) told the Delhi High Court on Thursday that it was examining the violations pointed out in two inspection reports with regard to Indiabulls Venture Ltd (IBVL) and Indiabulls Housing Finance Ltd (IBHFL).

The ministry, in its affidavit filed in response to a PIL by an NGO alleging financial irregularities by IBHFL, said it has received inspection reports of IBVL and IBHFL and the report on Indiabulls Real Estate Ltd (IBREL) is awaited.

The affidavit was filed before a bench of Chief Justice D N Patel and Justice C Hari Shankar and the PIL by the NGO, Citizens Whistle Blower Forum, is listed for hearing on Friday.

The ministry had informed the court earlier that the inspection reports for IBVL and IBHFL would to be ready by the end of October and for IBREL, by the end of November.

"In this regard, it is submitted that this ministry has received the Inspection Report(s) of IBVL and IBHFL on November 19 and November 15 respectively and the violations pointed out in the Inspection Reports are being examined. The third Inspection Report, in respect of IBREL, is yet to be received in this ministry," the ministry said in the affidavit on Thursday.

It said that regarding the loans given by IBHFL to five companies, as mentioned in the petition, the report stated that loans given to three companies gave been repaid and loans given to other two entities are reported to be 'standard accounts'.

The affidavit said remaining issues/ violations reported in the inspection report are under examination and it will be dealt as per law.

In an earlier affidavit filed in October, the ministry had said it has received various complaints against the Indiabulls Group of companies and some of them are being inspected.

Subsequent to the issuance of notices to the Centre and IBHFL in the matter, the company had moved an application alleging that the NGO and one of its members -- advocate Prashant Bhushan -- have made false statements in the PIL.

It had also moved a separate application seeking recall of the notice claiming that every day the matter was pending, it was suffering huge financial losses as its share value was dipping day-by-day.

According to the PIL, monies loaned by Indiabulls to various companies were routed back to its promoters through other entities.

The NGO, whose members also include former Delhi High Court chief justice A P Shah, former chief of naval staff Admiral L Ramdas and former IAS officer Aruna Roy, has sought a direction to the MCA to order an investigation by the Serious Fraud Investigation Office into the alleged irregularities by Indiabulls.

The petition has also sought a direction to the RBI and the National Housing Bank (NHB) to investigate the financial affairs of IBHFL and to direct a special audit of the company.

IBHFL has contended that the NGO was making allegations against it without doing proper research and was relying on a letter written by BJP leader Subramanian Swamy to Prime Minister Narendra Modi accusing Indiabulls of misappropriation of funds.

Swamy has publicly released the letter he sent to Modi in June, accusing Indiabulls of embezzling Rs 1 lakh crore from the NHB.

Indiabulls has opposed the plea saying it was a "malicious" and "mala fide" petition which was causing loss to it's business and reputation. PTI SKV HMP SA