Plea for probe into alleged funds misappropriation by Indiabulls; HC asks Centre, RBI to reply

The Delhi High Court on Friday decided to examine the allegations, in a PIL by an NGO, of financial irregularities, siphoning of funds and other violations against the promoters of Indiabulls Housing Finance Ltd (IBHFL).

A bench of Chief Justice D N Patel and Justice C Hari Shankar issued notice to the central government, the Reserve Bank of India and Indiabulls seeking their stand on the petition filed by an NGO.

The court also issued notice to the Securities and Exchange Board of India (SEBI), National Housing Bank (NHB), the Serious Fraud Investigation Office (SFIO), Registrar of Companies (ROC) and Sameer Gehlaut, the founder and chairman of Indiabulls group and asked them to file their replies by December 13-- the next date of hearing.

The bench decided to issue notice in the matter after brief arguments on behalf of the company, represented by senior advocates Mukul Rohatgi and Abhishek Manu Singhvi, and the NGO, for whom advocate Prashant Bhushan appeared in the matter.

Rohatgi urged the court not to issue notice and offered to file a response without it, saying that once notice is issued then it would be flashed on news media which in turn would affect the company's share values. The bench, however, did not agree.

During the brief arguments, NGO 'Citizens Whistle Blower Forum' told the court that around Rs 4,600 crore was allegedly loaned by Indiabulls to various shell companies which in turn routed the money though other entities back to the promoters.

The contention was vehemently opposed by Rohatgi who said: "Which fool will give an unsecured loan of Rs 4,600 crore?"