A speciality chemicals manufacturer has alleged that its former chief executive officer (CEO) was involved in a fraudulent scheme, which involved opening bank accounts in the name of the company's subsidiary, and borrowing crores of rupees in its name.
Ganesh Benzoplast Ltd (GBL) has filed a complaint against its former chief, Ramakant Pilani, and others, under various sections of the Indian Penal Code including Section 420. Pilani resigned earlier this month.
Until March 2023, Pilani was also listed as one of the directors of Susram Financial Services & Realty Private Limited, which owns 16.48 percent of Ganesh Benzoplast. GBL, in response to an email from Moneycontrol, said that Pilani has no shareholding in Susram Financial Services and Realty Pvt Ltd, and that other than being the CEO, he has no association or position with GBL.
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Background
In two filings dated April 2 and April 16, the company said that a bank account was opened in its wholly owned subsidiary GBL Chemical's name and that borrowings had been made through this account. Ganesh Benzoplast has also been named as a co-borrower along with its wholly owned subsidiary.
The company said the unauthorised borrowings and/or transactions were between Rs 40 crore and Rs 45 crore in its estimation.
Pilani was responsible for the chemicals division at GBL and its 100 percent wholly-owned subsidiary, GBL Chemical. In its exchange filings, Ganesh Benzoplast has said that the fraudulent transactions seem to have been orchestrated, facilitated, aided and abetted by a person named Manish Chaturvedi, along with Pilani.
The company informed Moneycontrol that the management was first made aware of these transactions late in the evening on April 1. It added that it made disclosures to the exchanges on April 2, with the details and information available at the time.
This does not seem to be the first time Pilani has been accused of opening bank accounts fraudulently and using them to borrow money. Newspaper reports from 2008 said that Kalachowkie police had registered a case against Pilani and his associates following a complaint filed by Devegya Cooperative Society. The complaints claimed that Pilani and his associates had opened various bank accounts using forged documents and had credited more than Rs 72 lakh in loans issued by the cooperative society into these accounts and disappeared.
It is not clear how the issue was settled.
In response to a query in this regard, GBL stated, “There are no proceedings ongoing against GBL in this matter and neither has GBL being (been) made liable or convicted for any offence in this matter.”
Forging senior management signatures
In the April 16 filing, the company also stated, "...it has become clear from the preliminary investigation that the signatures of Mr. Ramesh Pilani, Mr. Rishi Pilani and Mr. Raunak Pilani are all forged on these alleged lending documents / documents in relation to such unauthorised transactions. Accordingly, the Company and GBL Chemical have jointly filed a police complaint on April 4, 2024 against Mr. Ramakant Pilani, Mr. Manish Chaturvedi and others for offences punishable under Section 34, 120A, 120B, 415, 417, 418, 420, 463, 464, 465, 469 of the Indian Penal Code, 1860."
Ramesh Pilani is the chief financial officer, Rishi Pilani is the chairman and managing director, and Raunak Pilani is a director of Ganesh Benzoplast, according to the company's website.
In the email response to Moneycontrol, the company said that it believes that there is no financial liability that will devolve upon GBL and/or GBL Chemical. It added, “Both GBL and GBL Chemical have already taken necessary steps and actions against the persons involved including formally contesting these purported transactions.”
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The company has also filed a civil suit against Ramakant Pilani, Chaturvedi and others to declare the alleged transactions null and void, and to set aside any unauthorised documents issued on behalf of the company and/or its subsidiary GBL Chemical without its knowledge or proper authority.
The company has issued responses through its legal representatives to all the parties involved, denying all claims allegedly made against the company and GBL Chemical.
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