13 cos under MCA scanner for alleged money circulation

Corporate Affairs Ministry has cracked the whip this time around on 13 companies most of which are in real estate. The registrar of companies is investigating allegations of money circulation and money laundering. In fact even the RBI has trained its guns on the alleged scams, reports CNBC-TV18's Malvika Jain quoting sources.
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Jul 26, 2012, 10.52 AM | Source: CNBC-TV18

13 cos under MCA scanner for alleged money circulation

Corporate Affairs Ministry has cracked the whip this time around on 13 companies most of which are in real estate. The registrar of companies is investigating allegations of money circulation and money laundering. In fact even the RBI has trained its guns on the alleged scams, reports CNBC-TV18's Malvika Jain quoting sources.

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13 cos under MCA scanner for alleged money circulation

Corporate Affairs Ministry has cracked the whip this time around on 13 companies most of which are in real estate. The registrar of companies is investigating allegations of money circulation and money laundering. In fact even the RBI has trained its guns on the alleged scams, reports CNBC-TV18's Malvika Jain quoting sources.

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Malvika Jain (more)

Reporter, CNBC-TV18 |

Corporate Affairs Ministry has cracked the whip this time around on 13 companies most of which are in real estate. The registrar of companies is investigating allegations of money circulation and money laundering. In fact even the RBI has trained its guns on the alleged scams, reports CNBC-TV18's Malvika Jain quoting sources.

Time and again we have seen in reality sector that funds are collected for a particular project but they are eventually used for another project without the approval of the investors. This time too, something similar has happened. The companies under the scanner include Alchemist Infra Realty, Sunmarg, Sampriti Projects, Success Capital marketing, Rose Valley Real Estates, Mega Mould India, GoldMine Food Products, MPS Greenery Developers, Ramel Industries, Tower Info Tech, Rahul Hi-Rise, Prayag Info Tech Hi-Rise and Basil International.

These are probably some lesser known names but it is alleged that behind them are some bigger names. This is being looked into by the registrar of companies.

These 13 companies have been collecting funds for special schemes; say for allotment of residential projects or for time sharing in a resort. Eventually the funds are being diverted and are not being used for the specified purposes.

There are also complaints that some of investors were actually allocated debentures or preference shares, but upon maturity let alone interest amount even the principal was not returned or repaid to these duped investors who are now actually crying foul.

While the exact figure of the scam is not know but a parallel investigation is being conducted by the Serious Frauds Investigation Office into affairs of Basil International Group which managed to raise around Rs 1360 cr in approximately one year by duping investors in a similar fashion. Thus, one can imagine how much money these 13 companies would have collected over the years.

The registrar of companies, as well as the RBI, will be probing allegations of money laundering, misappropriation of funds and  mis-utilisation of funds. Remember that if a company collect funds for a specific purpose it is bound to use it only for that purpose unless the investor's consent is duly taken. It now remains to be seen if eventually some strong action will be taken against the guilty companies or not.

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13 cos under MCA scanner for alleged money circulation

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