Plea For Probe Into Fund Raising By Pal Distilleries Admitted

The petition also seeks to prosecute those found guilty under Section 24 of the Industrial Disputes Act and the Company Law. After admitting the writ petition filed by IIPC, represented by Arun Kumar Agarwal, the judge, Justice Ravindran, directed the issuance of emergent notices to all parties named in the petition.

The court posted the hearing to October 10, for deciding on an interim relief sought by the petitioner, following a request by the counsel for the company, Pal Distilleries. The petitioner has named Sebi, through its chairman, the Union of India through the secretary, department of industrial policy and promotion, and Pal Distilleries.

 

The interim reliefs being sought were direction to the CBI to investigate into the entire gamut from vetting the prospectus of the company by the Sebi, to the abetment by various agencies in allowing the management of Pal Distilleries to raise funds for a 10,000 kilo litres project while having only a letter of intent for 5,000 kilo litres.

While seeking directions asking Sebi to get all prospectus vetted to enforce compliance of all statutes, the petitioner sought a direction to force the company to deposit the Rs 7.43 crore raised from IPO until the case is disposed of by the court.

Pleading for the petitioner the counsel, B C Thiruvengadam, contended that by allowing the company to raise funds for 10,000 kilo litres against an letter of intent for manufacturing only 5,000 kilo litres, Sebi and officials of the Union industries ministry have actively abetted the firm to raise funds for an illegal project.

Quoting the Company Law and the Sebi Act to buttress his argument, the petitioner maintained,