CHENNAI: The Enforcement Directorate on Monday said shares of Vasan Health Care were acquired by overseas investors through the Compulsorily Convertible Preference Shares (CCPS) route directly from the company by investing Rs 432 crore in different rounds from February 2009 to November 2014. The shares were acquired on the face value of Rs 100 each.
However, instead of acquiring the shares from the company directly, overseas investors acquired it from the secondary market, from existing shareholders of the company and its promoter A M Arun, AMA Associates (a partnership firm belonging to promoter Arun and his father-in-law Dwarkanathan) and Advantage Strategic Consulting Private Limited, a company whose activities are found to be in total control of Karti P Chidambaram, ED said.
The first tranche of sale took place in 2010 end, when they were sold at Rs 7,500 per share. The second sale took place in March and May 2012 and the shares were sold at Rs 5,242 per unit. The total amount invested by overseas investors, which ultimately benefited the shareholders, was Rs 357.72 crore.
Arun’s wife, promoter of Vasan, who was allotted equity shares with the face value of Rs 100 each on payment of an additional premium of Rs 100, transferred 3,00,000 equity shares to her father Dwarkanathan without receiving any consideration. Arun then made a 1.5 lakh share transfer from Dwarkanathan to Advantage Strategic Consulting, who was in no way connected to the activities of the company till date.
The ED says that the shares, which had a face value of Rs 1.5 crore and were acquired by the original allottee for Rs 3 crore, was sold to Karti’s firm for Rs 50 lakh, that too after a period of one year from the date of transfer of shares. Arun, while negotiating with overseas investors in selling his stake, ensured that shares of Advantage were also sold. Advantage sold 30,000 of the total 1.5 lakh shares.
The ED said the CCPS were issued to overseas investors wherein the price or conversion formula was not determined upfront at the time of issue of shares. As per the agreements, the overseas investors were given assurance of the returns in one form or the other. “Such assurance of returns and non-determination of the price or conversion formula upfront are not permitted and are in contravention of FEMA,” the agency said.
“Vasan Health Care Pvt Ltd have not followed any of their statutory obligations as envisaged under FEMA, 1999, in their reporting mechanism to Reserve Bank,” the ED probe revealed.