New chapter in Oswal family saga; son alleges Rs 1,800 crore fund diversion

Pankaj has also alleged that funds from OAML were diverted to companies belonging to Naveen Jindal, Chairman of Jindal Steel & Power. Money was also transferred to Bhalla’s relatives, he claimed.

“We have also found that funds are being diverted from OAML to group company Oswal GreenTech (OGL), which is controlled by Ms Aruna Oswal and Mr Bhalla,” said an executive close to Pankaj Oswal, wanting to remain anonymous.

“This is evident from the fact that since late Mr Abhey Oswal’s demise, the financial performance of OGL has improved manifold while that of OAML has drastically reduced.  The controlling shareholders are using their control over OAML and using OGL as a conduit to misappropriate funds to the detriment of OAML,” Pankaj Oswal's office said in a statement.

“I will not let other people take the rightful share of the legal heirs and I will do whatever it takes to win the battle in a legal way,” Pankaj Oswal said in the statement. “I have discovered some hitherto hidden, but significant, wrongdoings happening at the group companies’ end. Abiding by the law, I will take every possible step to unearth the misconducts by the wrong people and seek justice,” he said.

Pankaj is being represented by J Sagar Associates at the NCLT.

Attempts to reach Mr Bhalla at OAML’s head office in Delhi proved futile.

Jindal’s clarification

While accepting that Jindal’s private companies have accepted funds from the Oswal Group, sources close to JSPL said that these transactions were done in accordance to corporate governance provisions.

“As is the practice, this was an agreement between two companies, where one gave loans to the other. Mr Jindal has cleared some of the loans, and continues to make timely interest payments on others,” said the executive cited above.

Jindal is married to Shallu Jindal, who is Pankaj's younger sister.

Shael Oswal, who is the youngest of Pankaj's siblings, is based out of Singapore and is a well-known singer and artist.

The saga

Abhey Oswal had started off as a trader and later went on to build a successful businesses in sectors such as fertilizers and petrochemicals.

The differences within the Oswal family came out in the open within days of the patriarch’s demise in March 2016. Three days after Aruna was chosen as the new Chairperson of the Group, a FIR was lodged against Pankaj and his wife Radhika for allegedly trespassing into company premises and for stealing official documents.

A month later, Pankaj served a legal notice to his mother, asking for a freeze on all the assets of the family. In February last year, he filed another petition in Delhi High Court claiming proprietary rights in his father’s estate. The value of the estate, as reported in dailies at the time, was pegged at Rs 2,500 crore.

According to the company’s filing, the promoter group held 41.41 percent stake, with most of the holding under the name of Aruna Oswal.

The latest twist comes in the form of the petition filed at the Chandigarh bench of NCLT on February 1. In the petition, Pankaj detailed his association with his father, helping Abhey Oswal set up a fertilizer plant that was later sold to IFFCO for Rs 2,180 crore.

Pankaj moved to Australia in 2001 and set up one of the world's biggest ammonia plants over there. While some claim that Abhey Oswal helped his son set up the plant, others say it was Pankaj’s idea.

But by the time the plant become operational in 2006, cost overruns and a fall out with an erstwhile partner had soured Pankaj and his wife Radhika’s high life in Australia. A lengthy court battle ensued with their bank ANZ  over allegations of fund embezzlement and sale of the ammonia plant.

The battle came to an end towards the end of 2016, with Pankaj and Radhika winning USD 200 million in claims against the bank. The attention has now shifted to India.