Sachdeva Lawyers Welcome Cbi Move

Lawyers of Pawan Sachdeva, the MS Shoes promoter, yesterday said they welcomed the Central Bureau of Investigation's (CBI) move to chargesheet their client.

They said they have a strong case in their hands and expressed optimism of quashing the charges against Sachdeva in the court of law.

"It is better that the CBI files a chargesheet in the court or else this case would just hang in balance," Dutt & Menon, lawyers of Sachdeva said.

The lawyers were responding to the CBI move to file a chargesheet against their client nearly two years after investigations into the M S Shoes scandal was concluded.

 

Sources said the main charge against Sachdeva is that he had diverted funds raised from a public issue in February 1995 to finance a rights issue, which opened on April 1 that year. "Investigations were over in August 1995 and the CBI had sought legal opinion on the matter, which were in our favour," Dutt & Menon pointed out.

Dutt & Menon says their client could not have diverted the public issue funds to finance his rights issue. This is because M S Shoes' Rs 350 crore public issue closed on February 18 1995, and according to the Sebi guidelines, the banks would release the funds mobilised through the issue to the company only after 90 days, which cannot be earlier than May 18, Dutt & Menon said.

The rights issue of the company opened on April 1 for a period of one month. "Hence there is no way our client could have diverted the public issue funds to the rights issue," Dutt & Menon said. The lawyers said their client also returned the funds mobilised from the public issue for failing to mobilise the minimum subscription of 90 per cent of the issue size.

"But the underwriters to the issue have not honoured their commitment," they said. The lawyers pointed out that the entire issue was underwritten and said that the court must direct the stock exchange to appoint an arbitrator to settle the issue.