The Enforcement Directorate (ED) on Tuesday attached assets worth Rs 32.175 crore of Satna based Kamal Sponge and Steel Power Limited (KSSPL), in connection with its probe in a coal block allocation case under Prevention of Money Laundering Act,2002.
The assets attached are in the form of balance in bank accounts and immovable assets, that is, land, plant and machinery, and power plant.
The ED initiated investigation in the case on the basis of an FIR registered by CBI against KSSPL, its directors and promoters, and others.
On October 13, 2014 the CBI had filed a closure report before the Special CBI Judge, at Delhi’s Patiala House Court but the court did not accept it then and took cognizance of the offence against the company and Director Pawan Kumar Ahluwalia, and others.
According to the ED, Thesgora-B/Rudrapuri Coal Block was allocated jointly to the said company and Rewti Cements Pvt Ltd on November 21, 2008 by the Ministry of Coal. While submitting application of allotment of coal block, KSSPL had mis-represented their net worth and production capacity, in order to embellish its claim on favorable recommendation for allocation of Coal Block.
The Supreme Court vide judgment dated August 25, 2014 had ordered cancellation of allotment of coal blocks including the one allotted to KSSPL.
After applying for allocation of coal block, the company received share application money amounting to Rs 86.469 crore during the period from 2007-08 to 2010-2011 from different companies/individuals, out of which they refunded Rs. 17.67 crore to some investors. The share application money so received was used by the said company for re-payment of term loan and other loans.
The company issued shares of face value of Rs. 100/- per share at par as well as at a premium of Rs. 900/- and issued shares for Rs 32.175 cores and did not allot shares for the remaining amount. The company received high premium because it had very high probability of getting coal block after misrepresenting the net worth and production capacity, which were relevant criteria for allocation of coal Block.
During the year 2007-08 to 2009-10, the company had issued shares at the premium of Rs 900/- per share whereas the trend of earning per share was not only insignificant but also decreasing. Further, the shares issued at the premium of Rs. 900/- per share to 33 different investors were further purchased by a different company at value of mere Rs 25/- per share.
Thus, the company has gained pecuniary undue benefit of Rs. 32,17,50,000 as share application money and share premium which is the part of the proceeds of crime derived as a result of criminal activity relating to the Schedule Offence.
Further investigation is in progress.
