The Madras High Court Monday reserved its orders on a public interest litigation from a Singapore-based firm to restrain companies with a criminal background from participating in the two-day Global Investors Meet (GIM) here, beginning on January 23.
The division bench, comprising Justices M Sathyanarayanan and P Rajamanickam, before which the PIL from Cascade Energy Private Limited came up, seeking a direction to the state to frame guidelines to protect foreign investors from getting cheated by tainted companies in the interest of the nation, heard arguments of the Advocate General and reserved orders.
Advocate General Vijay Narayan submitted that the state government has arranged the meeting only between foreign and Indian investors, details on the GIM were available in the website and that 2,900 companies had registered online.
The petitioner's counsel S Prabhakaran submitted that Cascde Energy was earlier cheated by an Indian solar project company of Rs 33 crore after it had invested the amount.
He said Cascade Energy purchased 51 per cent of equity shares belonging to the firm, but did not receive any returns on the investments made.
"The company found no developments towards investments. The money invested in the company was not utilised for the purpose for which it was invested. But it (Cascade Energy) was able to understand that the funds which were invested in the said company had been misused and transferred with mala fide intention into various shell companies for personal gains," Prabakaran said.
Claiming that such companies were utilising the GIM as a platform to commit such fraud on foreign companies, senior counsel P Wilson submitted that it was not against the meet, but only wanted the government to frame appropriate guidelines to protect the interests of investors, particularly those from other countries.
"The name and fame of Tamil Nadu is under serious threat. When foreign companies want to invest in the state, the government must bring in at least basic guidelines to protect them. Many companies which are in insolvency and bankruptcy proceedings are allowed to participate in the event," Wilson submitted.
The Advocate General submitted that all arrangements for the GIM have been made and the very purpose of this meet was to generate employment.
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