The Karnataka High Court on Wednesday stayed proceedings — initiated by the Serious Fraud Investigation Office (SFIO) — against Capt. G.R. Gopinath, former head of Deccan Aviation Ltd. (DAL) and two others, who were among the 14 individuals, including Vijay Mallya accused of committing fraud in the process of merger of DAL with Kingfisher Airlines Ltd. (KAL).
Justice K.N. Phaneendra passed the interim order on the petitions filed by Mr. Gopinath and two others. Ashok Wadhwa, a promoter of Ambit Group of companies; Vinod Wadhwani, a chartered financial analyst and cost accountant; and Ambit Pvt. Ltd., which is among the five accused companies, are the other petitioners.
The petitioners had questioned the December 28, 2017, order of the Special Court, constituted under the Companies Act, 2013, which had issued arrest warrants against 14 individuals after taking cognisance of a complaint filed by the SFIO based on its investigation report.
In its order, the Special Court had observed that the amount involved in the fraud was several hundred crores, and had hence issued arrest warrants instead of issuing summons to the accused persons, while treating the report submitted by the authorised officer of the SFIO as an investigation report under Section 173 of the Code of Criminal Procedure. Claiming that provisions of the Companies Act 2013 was not applicable to the case as the merger process was prior to 2013 Act, the petitioners claimed that the Special Court had no jurisdiction to deal with the complaint. They have also contended that the Special Court had not applied its mind before taking cognisance as it had not followed prescribed procedure, like recording statement of the authorised officer, who is the complainant.
The other individuals against whom the arrest warrants were issued are: A.K. Ravi Nedukandi (UB Group Chief Financial Officer); A. Harish Bhat (Treasurer and Director, United Breweries (Holdings) Ltd.); A. Raghunathan (Chief Financial Officer of KAL); Bharath Veeraraghavan (was the company secretary of KAL); Supratim Sarkar (Executive vice-president with SBI Capital Markets Ltd.); Rishab Mishra, Rajesh C. Jain, Sujal A. Shah, and Darshana Kadakia (all chartered accountants employed with private audit consultancy firms that were involved in merger process); and Srividya C.G.(a cost accountant employed in a private firm engaged in consultancy).
