Cheating case: Yash Birla's properties sealed by EOW after state govt nod

Faced with charges of duping investors in a multi-crore financial scam, the Maharashtra state home department on Monday gave the Economic Offences Wing (EOW) permission to seal properties owned by the embattled industrialist Yash Birla.

The state department has allowed EOW to attach Yash Birla’s Birla House, Malabar Hill, plots opposite Centaur Hotel in Juhu and Mahim and bank accounts of related companies, a Mid-day report said.

EOW has also sealed the demat accounts which belonged to Birla; Birla Power Solutions; Godavari Corporation Pvt Ltd; and Shearson Investment And Trading Co Pvt Ltd among others, Mumbai Mirror report said.

The Maharashtra government’s home department on 24 November, 2016 issued a notification to Birla, a Deccan Chronicle report said.

The notification reads: “Whereas complaint has been received from a number of depositors, against Birla Power Solution Limited, (herein after referred to as the said financial establishment) complaining that they have, collected funds and have defaulted to return the said deposit, by the depositors on demand”.

Last month, the EOW had filed a chargesheet against the businessman and seven others in this case.

The state department in the past had attached properties of Yash Birla, although he had offered to sell an Oshiwara property to pay off depositors, the Mumbai Mirror report added.

Besides Yash Birla, the special Maharashtra Protection of Interest of Depositors (MPID) Act court has also named YP Trivedi (senior Supreme Court lawyer, former Rajya Sabha MP and director of finance), Ashish Mahindakar (signing authority), Tushar Dey (legal head of the group), MS Arora (director), Anant Vardhan and Upkar Singh Trivedi.

The case

Two years ago, an FIR was registered against Birla Power Solutions Ltd (BPSL) and its then CFO PVR Murthy on charges of cheating investors.

A case of cheating was filed against Birla Power Solutions for allegedly duping a Worli businessman of Rs 1 crore by not paying his fixed deposit amount on maturity. As more people claimed to have been duped, the cheating amount swelled to Rs 350 crore.

On 30 January, 2014, the Managing Director of BPSL and Chief Finance Officer of the group PVR Murthy was arrested in the case.

In fact, Yash Birla’s BPSL company had lured investors with 42 percent annual interest and accepted cash deposits from them.

The acceptance of cash deposits was red-flagged by the company’s auditor from 2009 to 2010, chartered accountant Venkatesh Subramanium of Dalal & Shah too, the _Mumbai Mir_ror report said last month.

Murthy and other key officials were told by the auditor then that the firm was bending the rules of the Companies Act, 1956 by accepting deposits without issuing advertisements in newspapers.