Maharashtra Minister Subhash Deshmukh’s Lokmangal Agro’s Bank, Demat Account Attached
Market regulator Securities and Exchange Board of India (SEBI) has issued attachment orders against Lokmangal Agro Industries and seven of the company directors for failing to refund Rs74.82 crore to investors. The Lokmangal Group is associated with Maharashtra’s minister for cooperative, Subhash Deshmukh, whose wife Smita is one of the directors against whom SEBI has passed the order.
Earlier on 16 May 2018, SEBI had asked Lokmangal Agro and its directors, Smita Subhash Deskhmukh, Vaijnath Nagappa Lature, Audumber Sandipan Deshmukh, Shahaji Gulchand Pawar, Gurrana Apparao Teli, Mahesh Satishchandra Deshmukh and Parag Suresh Patil to refund funds worth Rs74.82 crore collected from investors with an interest of 15%. However, the company and its directors failed to refund the money to investors and did not furnish any report of repayment.
In its recovery proceeding orders issued on 3 January 2019, Jai Sebastian, deputy general manager and recovery officer of SEBI, says, “Till date, the defaulters have not replied and field any asset details. In these circumstances and as per the conduct of the defaulters, there is likelihood that the defaulter/s may take out the funds or securities from their bank or demat account…in order to protect the assets from any sort of alienation, it is necessary to attach the bank, demat and mutual fund accounts to prevent the defaults from removing or concealing the same.”
Lokmangal was banned from the securities market for at least four years. The funds were raised in contravention of the provisions of the Companies Act and Issue of Capital and Disclosure Requirements (ICDR) Regulations, the regulator said.
Lokmangal group from Solapur was headed by minister Deshkumkh, however after he was inducted in the state cabinet, he handed over the reins of the group to his son. However, the Lokmangal group has been under the regulatory lens of various authorities.
Besides the notice from SEBI, earlier in November 2018, Maharashtra government had asked the district dairy development officer from Solapur to file a first information report (FIR) against Lokmangal Multistate Cooperative Society, headed by Mr Deshmukh. This was result of cancellation of Rs24 crore contract given to the society by the department.
“A report submitted by the animal husbandry department had concluded that Mr Deshmukh’s society submitted forged and fabricated documents from the Maharashtra Pollution Control Board in Pune and Solapur; the Industrial Security and Health Department, Solapur; the Food and Drug Administration, Solapur; and Deputy Divisional Engineer, Public Works Department, North Solapur,” says a report from the Hindu