Delhi HC grants bail to accused in fraudulent transfer of Rs 344 crores mutual funds and securities

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The Delhi High Court has recently granted bail to a person accused in a case of fraudulent transfer of Rs 344 crores of mutual funds and securities held by Dalmia Cements Bharat Ltd. Justice Amit Mahajan has recently granted bail to V Hans Prakash. Justice Mahajan said that notably, the investigation is now complete and the charge-sheet as.well as a supplementary charge-sheet stands filed.

He further said that the present case is otherwise based on documents and all incriminating documents have already been recovered by the investigating agency and made part of the charge sheet. "Evidently, the custody of the petitioner is no longer required. In the given circumstances, no useful purpose will be served in keeping the petitioner behind bars," Justice Mahajan held in the judgement passed on August 7.

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The bench noted that it is also not the case of the prosecution that the petitioner has acriminal record. Further, the petitioner was never arrested during the investigation till the filing of the charge sheet nor he misused his interim bail, therefore, he does not seem to be a flight risk. "In view of the circumstances discussed above, this court is of the view that the petitioner is entitled to grant of regular bail pending trial, Justice Mahajan said.

The High Court also noted that the main accused namely, Awanish Kumar against whom serious allegations had been made has already been granted regular bail on 25.10.2021 by the High Court. The petitioner had moved a petition through Advocate Akshay Bhandari seeking regular bail in a case lodged under Sections 420/409/467/468/471/120-B/34 IPC by the EOW.

He was taken into custody after filing of a charge sheet on March 14, 2019. M/s Dalmia Cements Bharat Ltd filed a complaint against M/s Allied Financial Service Pvt. Ltd and others regarding the fraudulent transfer of mutual funds units/securities worth Rs 344.07 crores of the complainant. It is alleged that subsidiaries of the complainant company viz. OCL India Limited [OCL] and Dalmia Cement East Limited [DCEL] were interested in making mutual fund investments in May 2017 and thus, they opened Demat accounts with National Securities Depository Limited (NSDL) through its participant Allied Financial Services Pvt. Ltd (AFSPL).

Accordingly, Demat accounts in the name of OCL India Limited [OCL] and Dalmia Cement East Ltd (DCEL) were opened. After making an initial investment, several further investments and redemptions were made in the said accounts from time to time and the complainants were holding securities worth Rs.344.07 crores in the above accounts as of 28.12.2018.

Later on, the two companies were merged into Dalmia Cements Bharat Ltd (DCBL) and DCBL became the owner of securities. It is alleged that the complainant submitted redemption on 27.12.2018 but despite various requests, the redemption amount was not credited in the accounts. On 17.09.2019, the complainants reported the matter to NSDL and the NSDL through its reply of 25.01.2019 informed that there were no securities available in the DEMAT accounts of the complainants.

At the same time, accused Awanish Kumar Mishra, director of AFSPL vide his email dated 31.01.2019 confirmed to the complainants the holdings in the above DEMAT Accounts and regretted the delay in processing of redemption request and assured that the same would be processed by 06.02.2019. It is alleged that Awanish Kumar Mishra fraudulently transferred the credentials of the complainant in the account opening form and fed wrong credentials on NSDL server to deprive the complainant from getting an alert message for each transaction and that the accused Awanish Kumar Mishra further fraudulently transferred the mutual fund units of the complainant worth Rs 344.07 crores by using delivery instruction slips bearing forged signatures of authorized signatories of the complainant companies.

It is further alleged that during the investigation, it was found that the accused V Hans Prakash the head of the business department and chief business strategy officer of the IL&FS Securities Services Ltd. malafidely facilitated the main accused in using the said fraudulently transferred mutual fund units for margin.

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