CBI files case against CARE, IDFC, Deccan Chronicle, officials of United India in Rs 30 cr fraud

IMA Ponzi scheme case: A multi-crore scheme run by Karnataka-based I-Monetary Advisory (IMA) and its group entities allegedly duped lakhs of people by promising higher returns using Islamic ways of investment. The Central Bureau of Investigation (CBI) is currently investigating the case and has filed at least three FIRs. (File image of the CBI headquarters)

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The Central Board of Investigation (CBI) has filed a case against Deccan Chronicle Holdings, CARE Ratings, Infrastructure Development Finance Company (IDFC) and a few officials of United India Insurance, in connection to a fraud of Rs 30 crore.

The FIR states that some officials of United India Insurance, along with Deccan Chronicle Holdings (DHCL), CARE Ratings, and IDFC, entered into a criminal conspiracy and made suspicious investments in privately placed short-term unsecured redeemable non-convertible debentures issued by DCHL.

DCHL was represented by Chairman T Venkatram Reddy in the deal, while IDFC was represented by CFO Sunil Kakkar. The officials of United India Insurance involved in the case were then deputy general manager (investment department) A Balasubramanian and chief manager (investment department) KL Kunjilwar.

The debt instruments were not honoured by DCHL, which resulted in a loss of Rs 30.54 crore for the insurer.

The FIR further states that the one of the above-mentioned officials of United India put forth the proposal and the other approved it. The insurer had relied on CARE's ratings on the instruments, and had not done any due diligence on its own. The debentures were bought through IDFC, their sole arranger.

After DCHL failed to repay either the principal amount or the interest,  United India lodged a complaint against DHCL. The complaint is pending before the jurisdictional court.