HC restrains Alchemist Group from transferring money to any foreign entity

The Calcutta High Court today restrained Alchemist Group from transferring money to any foreign entity without its permission and asked the business house and its Chairman K D Singh to respond to market regulator Sebi's plea for a probe into their alleged attempts to siphon off funds to a tax haven.

Passing an interim injunction, the court also restrained Alchemist Group and Singh from entering into a business contract with any foreign entity without its permission.

A division bench comprising justices Joymalyo Bagchi and R Bharadwaj directed the Group and Singh to file an affidavit with regard to the plea by the Securities and Exchange Board of India (Sebi) within four weeks and asked the capital market regulator to file its affidavit in opposition in another two weeks after that.

The matter will come up for hearing after six weeks, the court said.

Seeking directions for a thorough probe, Sebi had told the bench that Singh was allegedly trying to siphon off around USD 100 million from the money deposited by gullible investors to tax havens, including for buying strip clubs and vacation homes abroad.

Sebi's counsel Hirak Mitra submitted before the division bench that the regulator was not legally competent to conduct such a probe and sought the court's direction to competent agencies to investigate the matter.

Alchemist's counsel Shyamal Sarkar rejected the allegations and said the company was selling land assets to pay back the investors.

In its application, Sebi said, "K D Singh is in the process of siphoning off around USD 100 million, earned by way of duping innocent public in the guise of fake deposit scheme, in buying companies abroad via tax havens."
The regulator said it has been informed of all these assets and the nature of their dealings, but "it (the regulator) is neither authorised nor legally competent to make investigation in this regard and also not competent to recover assets as it involves flow of funds abroad and assets in foreign jurisdictions, if the information is correct."