HC clean chit to Ghai’s company
After Bollywood director Subhash Ghai’s latest film Yuvraaj bombed at the box office, the Bombay High Court has given him some reason to cheer
After Bollywood director Subhash Ghai’s latest film Yuvraaj bombed at the box office, the Bombay High Court has given him some reason to cheer. The HC on Wednesday gave a clean chit to Ghai’s company Mukta Arts which was facing an inquiry for alleged financial irregularities.
Justice SC Dharmadhikari quashed an order issued by the Company Law Board (CLB) in 2005 directing investigations against the company on allegations of investing Rs64.88 crore collected through an initial public offer (IPO) in the stock market and its links with tainted stock broker Ketan Parekh and diamond merchant Bharat Shah.
In April 2001, Small Investors Protection Forum had lodged a complaint against Mukta Arts, which has produced hits like Karz, Taal and Iqbal. It was alleged that Mukta Arts had a common tie through Triumph International Finance India Ltd and Ketan Parekh Group of Companies (KPGC) and they were involved in price manipulation of shares.
It was alleged that the rapid enhancement in the company’s capital to the extent of Rs11.28 crore and diversion of funds clearly indicated “the positive role of the company in the Ketan Parekh security scam.”
Inspection reports of Ministry of Corporate Affairs revealed that Bharat Shah, who was arrested for underworld links and charged with foreign exchange violation, was the company’s director between March 2002 and April 2003.
Noting that the CLB had erred in allowing an investigation, the HC noted that the increase in the company’s share capital was due to the IPO and the allegations that proceeds of the IPO were invested in the stock market remained unsubstantiated.
The HC also noted that Shah had no participation in the company’s management and did not attend any of the eight board meetings held during his term.
Justice SC Dharmadhikari quashed an order issued by the Company Law Board (CLB) in 2005 directing investigations against the company on allegations of investing Rs64.88 crore collected through an initial public offer (IPO) in the stock market and its links with tainted stock broker Ketan Parekh and diamond merchant Bharat Shah.
In April 2001, Small Investors Protection Forum had lodged a complaint against Mukta Arts, which has produced hits like Karz, Taal and Iqbal. It was alleged that Mukta Arts had a common tie through Triumph International Finance India Ltd and Ketan Parekh Group of Companies (KPGC) and they were involved in price manipulation of shares.
It was alleged that the rapid enhancement in the company’s capital to the extent of Rs11.28 crore and diversion of funds clearly indicated “the positive role of the company in the Ketan Parekh security scam.”
Inspection reports of Ministry of Corporate Affairs revealed that Bharat Shah, who was arrested for underworld links and charged with foreign exchange violation, was the company’s director between March 2002 and April 2003.
Noting that the CLB had erred in allowing an investigation, the HC noted that the increase in the company’s share capital was due to the IPO and the allegations that proceeds of the IPO were invested in the stock market remained unsubstantiated.
The HC also noted that Shah had no participation in the company’s management and did not attend any of the eight board meetings held during his term.