HC directs SFIO to probe Mangalam Agro fund misuse allegation

The Calcutta High Court today directed that the Serious Fraud Investigation Office (SFIO) would investigate into the alleged fund misuse by Mangalam Agro Products.
Acting on a petition by debenture holders of the company, Justice N Patherya directed that the central investigating agency SFIO would probe the allegation that a large number of creditors had been defrauded.
The court, under Article 237 of the Companies Act, directed the central government to appoint SFIO to investigate the affairs of the company.
Justice Patherya also directed that the SFIO would take charge of the case within three weeks.
The court also rejected the company's petition for holding a meeting of investors and debenture holders for preparing a scheme for repayment as it held that there was no clear proposal in the scheme.

The court also noted that the balance sheet and the auditor's report of the company did not tally.

The investors and debenture holders had claimed that the petition by the company was an eyewash only to avoid any action against it.
The court had on June five directed that it would hear today a plea by the debenture holders in Mangalam Agro for a CBI probe into alleged fund misuse by the company.
After hearing the matter, Justice Patherya directed that SFIO would investigate the matter.
The debenture holders had alleged that there was a huge difference between what the company was claiming in its balance sheet and the actual balance sheet.

Earlier on June 2, market regulator SEBI had barred Mangalam Agro Products and its directors from soliciting funds through issue of securities.
The Securities and Exchange Board of India (Sebi) had found that the company raised funds from public by issuing Non-Convertible Debentures ostensibly by way of private placement without regulator's approval.
In an order dated May 30, Sebi said Mangalam Agro Products Ltd (MAPL)and its directors --Kamolesh Kumar Ghosh, Ujjal Sikder and Tapan Kumar Dey-- were prohibited from issuing prospectus or any offer document for soliciting money from the public for the issue of securities, till further orders.
These entities have been restrained from raising money from the public either directly or indirectly.