MCA examining CLB options in Sesa Goa case

The Ministry  of Corporate Affairs (MCA) will take a call on whether there is a case for further action against Vedanta Group firm Sesa Goa, which was probed by Serious Fraud Investigation Office (SFIO) for alleged irregularities in its iron ore trading.

While the SFIO has filed prosecution against the company in a Goa court for economic offences, the MCA is examining whether action can be taken against Sesa Goa board as well, sources said.

The prosecution has been filed for alleged irregularities in invoicing of imports and exports pegged at Rs 1,000 crore.

Senior officials of the MCA would soon be meeting to firm up the plan of action, which may include seeking legal opinion in the cases, sources said.

In case, the MCA decides to proceed ahead against the board, it would approach the Company Law Board (CLB) seeking harsh punitive action against Sesa Goa which will be merged with Sterlite Industries.

"We are considering whether to move the Company Law Board seeking dissolution of Sesa Goa's board in the light of the SFIO report which has alleged role of the board in the under/over invoicing," an official said.

The SFIO a few months ago had filed prosecution against the company, Managing Director, and Company Secretary in a Goa court for alleged violations under the Companies Act, 1956.

When contacted, a Sesa Goa spokesperson said, "the company is not aware of any such action at this point of time."

The development comes parallel to the announcement of another Vedanta group firm Sterlite Industries' merger with Sesa Goa, which is aimed at creating an Indian metals and mining conglomerate with the revenues of $20 billion.

Shares of Sesa Goa today tumbled by over 10% today on the BSE, following the merger announcement.

Under-invoicing results into avoidance of taxes. In 2009, the SFIO was asked to investigate the affairs of Sesa Goa, following a report of the Registrar of Companies (ROC).

The RoC had been looking into Sesa Goa's case since 2003 when the company was majority-owned by Mitsui Co. Anil Agarwal-promoted Vedanta Resources acquired 51% controlling stake in Sesa Goa in 2007 from the Japanese company for $981 million.