CHENNAI: The Enforcement Directorate (ED) appears to have finally woken up to the need for a probe into the surreptitious manner in which huge amounts, running into crores of rupees, flowed into Vasan Health Care Pvt Ltd (VHCPL), to which former finance minister P Chidambaram and his son, Karti Chidambaram, are linked.
On August 28, two separate summons were issued by Dr Rajeshwar Singh, deputy director, ED — one to the managing director of M/s VHCPL and the other to V Dwarakanathan — the latter used as a conduit by Karti Chidambaram to increase his stake in Vasan via some front companies.
In his summons, Rajeshwar Singh explained that he was investigating under the Prevention of Money Laundering Act, 2002, and that the attendance of the managing director of VHCPL was necessary in connection with it.
In an annexure to the summons, the ED has sought information on eleven different aspects pertaining to the company. They include: (a) names and addresses of companies, firms and trusts in and outside India in which promoters, directors and shareholders of the VHCPL held positions since 2007 to 2012; (b) details of those who exited or entered the company between 2007 and 2012, along with number of shares issued, amount paid, premium, if any; (c) copy of the balance sheet for the same period; (d) net worth, profit and loss and dividend paid during these years; (f) details of shares and debentures issued by VHCPL; and (g) details of deposits received from individuals and companies and loans given during financial years 2007-08 to 2011-12.
In the other summons sent to Dwarakanathan, the ED sought copies of his passports, names of his family members, copy of I-T returns filed from 2004-05 to 2010-11, details of bank accounts and immovable assets held by him in India and outside since 2005, transactions done with companies of Karti Chidambaram and his family, names and addresses of companies in and outside India whose debentures and shares he acquired and transferred since 2005 under secondary sale of shares or in the market. The ED has also sought information about names and addresses of individuals from whom such shares and debentures were acquired and to whom they were transferred, amount paid for acquisition and amount received by transfer.
As reported in these columns, Vasan was first incorporated in 2007 with Dr M Arun and his wife, Meera Arun, as first shareholders, both of whom were issued 27 lakh shares of Rs 100 per share on a premium of Rs 100 plus. Three lakh shares were separately given to Dwarakanathan at the same price and premium.
Then begins the game. Within 48 hours of acquiring the shares, Dwarakanathan transferred half of his holdings (1.5 lakh shares equivalent to five per cent of Vasan’s capital) to a company which goes by the name, Advantage Strategic Consulting Private Ltd. This company is two-thirds owned by Ausbridge Holdings and Investments Pvt Ltd, which Karti Chidambaram (KC) holds almost fully. But the transfer of shares happened without any premium having been paid. In other words, KC’s company secures Vasan’s shares for a lesser price.
Why has Dwarakanathan chosen to buy shares at a premium and then sell them by incurring loss, is the obvious question that the ED has to look into. That could well and truly blow the lid off the entire operation of Vasan, whose turnover grew by 38 times in just three years.
If only the ED pursues the matter to its logical end, the link between Vasan and KC via Dwarakanathan will become known. For the last few years, no one doubted that the de facto owner of Vasan was KC. Otherwise, Vasan could not have raised equity of Rs 230 cr but a debt of over Rs 600 cr.