Pincon Spirits admits arrest of its Chairman Monoranjan Roy, but mum on why it failed to update the exchanges

Moneylife Digital Team 08 November 2017

Kolkata-based Pincon Spirits Ltd has admitted that its Chairman Monoranjan Roy was arrested by Police on 2nd November from Bengaluru airport and is in custody of Jaipur Police till 9 November 2017. The company gave this clarification as sought by BSE based on a news published by Moneylife. However, Pincon Spirits has not given any reason as to why it failed to share this price sensitive information with the Exchange.

Following the Moneylife news, BSE sought clarification from Pincon Spirit on 6 November 2017. Pincon filed its clarification on 7th November. The clarification says, "First information report (FIR) relating to the event was filed on 2 November 2017. Mr Roy, Chairman and Managing Director of Pincon was arrested at 8.40pm on the same day from Bangalore airport. He was produced before the Chief Judicial Magistrate at Jaipur on 3 November 2017 and was remanded to Police custody till 9 November 2017."

As per report, Roy and his associates Raghu Shetty, Binay Singh and Hari Singh had raised about Rs56 crore from over 25,000 investors from Rajasthan alone. Apparently, they have also raised around Rs1,600 crore from over three lakh investors from Gujarat, Madhya Pradesh, Bihar, Haryana and Uttar Pradesh through multiple shell companies. Roy had set up multiple shell companies like LRN Finances, ASK Financial Services, Greenage Food Products Ltd, Bengal Pincon Housing Infra Ltd, LRN Universe Private Ltd and Universal Multi-state Credit Co-operative Society to cheat people, the report says.

The filing from Pincon, however, says, "Roy is totally innocent and has been falsely implicated in the charges of duping people through any scheme that has allegedly duped people across several states in India...The company relied on source for its capital inflow from banks and financial institutions in form of a consortium withdrawal credit (WC)."

However, according to Rajasthan Police, investors' money was siphoned off and moved into the accounts of Pincon Spirits, a public listed company. "The money of investors was siphoned to the Pincon. However, once the debentures matured, they told investors that their money has been 'reinvested' in another company. The investors were offered fake intensives to justify the 'reinvestment'. But the company in which the money was reinvested was liquidated by them," the report, quoting Sanjay Shrotriya, Superintendent of Police for Special Operations Group (SOG), Rajasthan, says.

The investigations carried out by the SOG found that Roy and his associates raised Rs56 crore from investors in Rajasthan and returned Rs7 crore in small accounts while siphoning off Rs39 crore.