The Ministry of Corporate Affairs (MCA) has ordered the Serious Fraud Investigation Office (SFIO) to investigate the charges of cheating and diversion of funds amounting to more than Rs 1,000 crore by Bilcare Ltd, a company in which ace Investor Rakesh Jhunjhunwala recently invested.
Bilcare was in the news recently after Jhunjhunwala made Rs 13 lakh daily from the stock in 69 sessions since March 23, 2020.
The Registrar of Companies (RoC) has already conducted one round of inquiry against the Pune-based company and submitted a report to the ministry.
“The RoC found that the company, in the last six years, has accepted deposits from public/shareholders amounting to about Rs 350 crore and failed to pay interest amount to the tune of about Rs 150 crore as on March 31, 2019, to thousands of deposit holders,” a source told Moneycontrol.
“The company has also diverted more than Rs 1,000 crore as investments, and loans and advances to foreign subsidiaries in Mauritius, Germany, Italy and Singapore. It has made investments amounting to about Rs 500 crore in wholly-owned subsidiaries like Bilcare Singapore Pte Limited. The entire amount was lost after the Singapore High Court ordered the liquidation of the subsidiary," the source said.
The RoC initiated the inquiry after receiving complaints from many deposit holders.
Confirming the SFIO probe, a source in the ministry said, "Continuing its action against companies which raise deposits from public and siphon off funds, the ministry has ordered an SFIO investigation into the affairs of Bilcare Ltd.”
Bilcare deals in pharma packaging solutions and clinical material supplies for new drug discovery projects.
Bilcare has been paying interest on time to all deposit holders, even during COVID-19, company sources said. “The company is responding to the letter from SFIO with appropriate advice from its advocates,” they said.
“Another observation in the RoC report is that the company has taken huge loans amounting to about Rs 714.37 crore from various banks from time to time and has defaulted on repayments. The company owes about Rs 2,000 crore to banks in India and abroad. These banks have declared Bilcare as a non-performing asset (NPA)," another source said.
The SFIO may also investigate the role of the statutory auditor in this case.