Karnataka HC seeks govt response on plea against ponzi firms

The court adjourned the hearing to August 8 while directing the SIT to submit the further status report on investigation, and the CA to file affidavit explaining further action.
Karnataka High Court ( Photo | Debdutta Mitra, EPS)
Karnataka High Court ( Photo | Debdutta Mitra, EPS)

BENGALURU:  The Karnataka High Court on Thursday directed the competent authority appointed under the Karnataka Protection of Interest of Depositors in Financial Establishments (KPID) Act, 2004, to conduct a comprehensive forensic audit of IMA and its associate companies, directors and partners  to track the inflow and outflow of funds in the unregulated deposit schemes.

The court has also asked the state to submit its response on the petitioners’ plea for issuing directions to probe other ponzi companies, and also appointment of competent authorities (CAs)  to deal with complaints against those companies. A division bench of Chief Justice Abhay Shreeniwas Oka and Justice Mohammad Nawaz issued these directions during the hearing of a batch of petitions, including public interest litigation, seeking a probe into ponzi companies. 

Directing the state to submit its response on the CBI probe sought by IAS officer B M Vijay Shankar, arrested by the Special Investigation Team (SIT), the court asked the Enforcement Directorate (ED) to share the details of properties attached with the SIT and do investigation in coordination with each other. 

The court directed the CA to publish the public notice seeking information about properties of IMA and its entities, benami properties, if any, in Urdu newspapers with wide circulation, as most of the depositors are Muslims. This was after a petitioner’s counsel sought such directions, as the public notice was published in Kannada and English newspapers only. 

The court adjourned the hearing to August 8 while directing the SIT to submit the further status report on investigation, and the CA to file affidavit explaining further action. Meanwhile, the court has ordered its registry to keep the status report, submitted by SIT, and that it should not be opened without the court’s order. 

IAS officer submits affidavit
Bengaluru Division Regional Commissioner V Rashmi Mahesh, who was appointed as CA under KPID Act to handle the depositors’ complaints against IMA, submitted an affidavit to the High Court explaining the steps taken to protect the depositors’ interests. The CA has stated that certain properties, of IMA and its allied concerns have been attached based on SIT report. “Letters are also addressed to the appropriate authorities in other states for information on properties of IMA and related concerns,” he said.

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