HYDERABAD: The Enforcement Directorate (ED) has apprehended Nirmal Kotecha, Pavan Kuchana and Kishore Tapadia under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 in connection with the Initial Public Offering (IPO) scam related to M/s Taksheel Solutions Limited, based in Hyderabad. The arrest took place on October 11.
According to the ED, Kotecha and Kuchana are presently residing in the Republic of Vanuatu and the US, respectively. The ED initiated its investigation following a complaint filed by the Securities and Exchange Board of India under Sections 12(A) and 24 of the SEBI Act, 1992 against Taksheel Solutions, its promoters, directors and others for irregularities in the IPO issuance of 55,00,000 shares of Rs 10 each, with an issue price fixed at Rs 150, through which the firm raised Rs 80.50 crore.
During its investigation, the ED uncovered a well-planned conspiracy by Kuchana, Kotecha and Tapadia to artificially inflate the revenue of MTaksheel Solutions, both during the IPO issuance and in the subsequent diversion and siphoning off of the IPO proceeds.
It was disclosed by the ED that Kotecha facilitated the IPO by arranging Inter-Corporate Deposits (ICDs) worth Rs 34.50 crore for Taksheel Solutions. These funds were routed through US-based entities belonging to Kuchana, involving circular transactions with Taksheel Solutions before the IPO, leading to an increase in revenue and profitability, on paper. After the IPO, the ICDs were repaid from the IPO proceeds.
Investigation revealed that of the IPO proceeds totalling Rs 80.50 crore, an amount of Rs 34.50 crore was diverted to US-based entities belonging to Kuchana under the pretence of payment for services. From these US-based entities, another Rs 30.50 crore was transferred to entities in Singapore and Hong Kong under the control of Kotecha.
An additional Rs 23 crore from the IPO proceeds was transferred to Indian entities, disguised as software product purchases, and was subsequently channelled to Kotecha’s entities based in Hong Kong and Dubai.
Moreover, a sum of Rs 18 crore from the proceeds of the crime was transferred from Taksheel Solutions to various individuals and entities under various pretexts, including IPO-related expenses, vendor payments, STPI development expenses and salaries.
The three accused in the case were presented before the Court of the Metropolitan Sessions Judge at Nampally, Hyderabad, on Thursday. The court granted judicial custody till October 25.