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Informist, Thursday, Jul 25, 2024

 

NEW DELHI – Hearing a petition seeking the Reserve Bank of India to enquire into the affairs of Exclusive Capital Ltd to verify allegations of siphoning, the Delhi High Court has observed that the central bank was allowing themselves to be taken for a ride inasmuch as repeated notices sent by the RBI were being circumvented by the company. The high court issued a notice to RBI and asked it to file an updated status report as to the outcome of the proceedings conducted by it against the company.

 

The high court noted that a strong inference is invited that although Exclusive Capital is a non-banking financial company, its present management has a lot to answer with regard to the manner in which it is conducting its affairs. "...it is prima facie evident that respondent No.1/RBI is allowing themselves to be taken for a ride inasmuch as repeated notices sent by respondent No.1 are being circumvented in the sense that relevant documents are not being submitted and corrective steps have not been taken by respondent No.2 (Exclusive Capital)," the court said.

 

The petitioner, Evaan Holdings Pvt Ltd, said it had sent detailed complaints to RBI highlighting various aspects of mismanagement and financial improprieties, including misappropriation and siphoning off of funds, by Exclusive Capital through its board of directors, but no action has been taken so far by the central bank. The petitioner sought a special audit of the financial transactions by Exclusive Capital from October 2021 by the RBI. The petitioner also sought removal of Satya Prakash Bagla, Achal Jindal and Johnson Kallarachal Abraham from board of directors of Exclusive Capital.

 

It is to be noted that two shareholders of Exclusive Capital are already up in arms against the company and the issues concerning the operation and mismanagement in its affairs have been highlighted in the National Company Law Tribunal. In May, the National Company Law Appellate Tribunal had appointed an observer for the company and said that no major policy decision should be taken by the board and let there be no alienation of assets of Exclusive Capital till the next date of hearing. 

 

Advocate Parag Tripathi, counsel for the petitioner, said the present management of Exclusive Capital is not even cooperating with the observer appointed by the tribunal and to that effect, a report has already been filed by the observer which is pending consideration. The high court will now hear the case next on Aug 13.  End

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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