New Delhi [India], October 13 : The Enforcement Directorate (ED) arrested Nirmal Kotecha, Pavan Kuchana and Kishore Tapadia under the provisions of prevention of money laundering case relating to the alleged Initial Public Offer (IPO) scam of Taksheel Solutions Limited, Hyderabad.
Nirmal Kotecha and Pavan Kuchana are presently residents of the Republic of Vanuatu and the US, respectively, the enforcement agency posted on X.
"The arrested accused persons are produced before the Hon'ble Court of MSJ, Nampally, Hyderabad on 12/10/2023 and the Hon'ble Court has granted judicial custody till 25/10/2023," it posted on X.
Reportedly, a probe conducted by SEBI found that Taksheel Solutions had suppressed vital information and made factually incorrect statements in its IPO prospectus which was misleading for the public.
"ED investigation revealed that Pavan Kuchana, Nirmal Kotecha and Kishore Tapadia formulated a meticulously planned strategy to inflate the revenue of M/s Taksheel Solutions Limited for issuing IPO and for subsequently diverting and siphoning off the IPO proceeds. To facilitate the issue of IPO, Nirmal Kotecha arranged Inter-Corporate Deposits (ICDs) of Rs. 34.50 Crore to M/s Taksheel Solutions Ltd," ED said.
The said funds, the ED said, were rotated through US-based entities belonging to Pavan Kuchana and circular transactions were done with Taksheel Solutions Ltd. before the IPO which resulted in incremental revenue and corresponding inflation of profitability. Subsequent to the IPO, the ICDs were repaid from the IPO proceeds.
ED investigation further revealed that out of the IPO proceeds of 80.50 crore, an amount of Rs 34.50 crore was diverted and siphoned off to US-based entities of Pavan Kuchana on the pretext of payment for the supply of services. From these US-based entities, an amount of Rs 30.50 crore was further transferred to Singapore and Hong Kong-based entities under the control of Nirmal Kotecha.
"Out of the IPO proceeds, another amount of Rs. 23 crore was transferred to Indian entities in the guise of purchase of software products and was eventually transferred to Nirmal Kotecha's entities based in Hong Kong and Dubai. Proceeds of the crime of Rs 18 Crore were transferred from M/s Taksheel Solutions Ltd. to various individuals/entities on the pretext of IPO-related expenses," among others, it added.
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