Is Rajkumar Basantani of Soundcraft Industries, Adam Comsoft and Kolar Biotech absconding?
According to a police report, Basantani has fled the country four years ago to Dubai. However, a person familiar with the matter says Basantani was present in the country till January this year
Rajkumar Basantani of Soundcraft Industries, Adam Comsoft and Kolar Biotech has reportedly fled the country after duping investors and banks of a few hundred crores. The Khar Police in Mumbai has reportedly filed a report that Basantani has fled to Dubai four years ago.
In a case related filed by market regulator Securities and Exchange Board of India (SEBI), the Mumbai Session Court has issued non-bailable warrant against Basantani and asked Senior Inspector of Khar Police Station to arrest and produce Basantani on or before 17 March 2016.
However, Indur Chhugani, who is embroiled in legal battle with Basantani says the information filed by the Police in the Court is not true. "In one of my case, he (Basantani) recorded a statement on 1 November 2015 at the Khar Police Station. Again, he was present before the special Maharashtra Protection of Interest of Depositors (MPID) Court on 21 January 2016. So how can the Police say he (Basantani) fled the country four years ago," Chhugani questioned.
In 2004, Rajkumar C Basantani duped the investors for about Rs1,000 crore. His three companies managed to siphon over Rs200 crore from 30 banks that lent him money including Punjab National Bank (Rs11.5 crore), Bharat Overseas Bank (Rs five crore) and Greater Bombay Co-operative Bank (Rs5 crore). In each case, he collected money by inflating the value of physical assets that were offered as collateral security or against the ramped-up shares of the three companies. The media has reported some of this, including an investigation by the Serious Frauds Office, which unearthed 50 other companies floated by him and the fact that he employed drivers and peons as directors in his companies. (Read: Colluding Bankers
Earlier in January 2014, market regulator Securities and Exchange Board of India (SEBI) had ordered attachment of bank and demat accounts of stock broker Basantani, to recover Rs15 crore, one of the highest penalties imposed by the market regulator on an individual at that time, in a case related to fraudulent activities in shares of Kolar Biotech Ltd. Back in November 2008, SEBI had penalised Basantani, one of the promoters of Kolar Biotech, for making false and misleading advertisements to the public in order to bring about an increase in the price of the shares of the company.
In August 2012, SEBI suspended broker Basantani, who was also promoter and chairman of Soundcraft, for one year while brokerage firm Kolar Sharex for three months. Basantani and Kolar Sharex were registered with NSE and BSE, respectively. The SEBI probe looked at the trading of SIL shares between 3 December 2003 and 17 August 2004 to ascertain possible violations. It found that Basantani made an announcement of bonus shares to its shareholders on 5 December 2003 and the same was approved by its shareholders on 31 December 2003. However, the company failed to dispatch certificates related to bonus shares. Later, when the confirmation about the dispatch of shares was sought from Soundcraft, the company was found closed.
"Such device was orchestrated Rajkumar C Basantani who is promoter/director of the noticee (Kolar Sharex)to ensure that entities related to Rajkumar C Basantani/SIL could take advantage of the gullibility of the defrauded investors and offloaded their shares in the market," SEBI said in its order. (Read: SEBI suspends two broking entities for misleading investors
Last year in March, the Bombay High Court has set aside an order passed by SEBI to arrest Vinod Kumar Hingorani (brother of Basantani's wife), the first person to be jailed by the markets regulator. Hingorani, chairman of two companies that issued misleading advertisements to investors, had defaulted on penalties of Rs1.64 crore.