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Ashish Mittal vs Serious Fraud Investigation … on 3 May, 2023, The petitioner is forbidden from making contact with, calling, or visiting any witnesses for the prosecution or other people familiar with the case’s circumstances, whether directly or indirectly.

Facts:

Educomp Solutions Ltd., or ESL for short, was established in 1994. Its managing director was Shantanu Prakash, and his father, Jagdish Prakash, was a full-time director. Due to a number of factors, ESL was forced to choose corporate debt restructuring in 2013 and entered into a Master Restructuring Agreement (MRA) on March 25, 2014, with a group of lenders (banks) led by the State Bank of Patiala, a bank that has since merged with the State Bank of India. The Ministry of Corporate Affairs assigned the SFIO to conduct the inquiry into the affairs of ESL in an order dated August 17, 2018, with the order number 1/52/2017. After the inquiry against ESL began, permission was also sought to look into the business operations of the company. For the purposes of the current petition, the essential factual matrix is that Shantanu Prakash, the managing director of ESL (A-16 in the prosecution case), was obliged to put up Rs. 240.76 crores of his own money as a “promoter contribution” as part of the CDR proposal for ESL. According to the allegations, Shantanu Prakash syphoned off Rs. 240.76 crores from ESL and received that money back into his personal bank accounts from about 65 companies/entities through shady transactions. He then claimed that this money was his promoter contribution for the CDR process instead of investing his own money in it. Accordingly, it is claimed that Shantanu Prakash’s investment as promoter was made using money that was not his own but rather money that Shantanu Prakash had syphoned off through several firms. According to section 447 of the 2013 Act, fraud in the business operations of the firms Under Investigation (“CUIs”) was committed by employing paper firms (split into five groups) and syphoning off monies from CUIs into the accounts of Shantanu Prakash’s close friends. The pertinent allegations are as follows:

Ashish Mittal, formerly of the Educomp Group 120. Ashish Mittal joined ESL on November 1, 2013, as Vice President (Finance), and on May 26, 2014, he was elevated to CFO of the Educomp Group. He left on February 24, 2018. Prior to becoming the CFO of the Educomp group, he provided professional services to ESL through his company, Lotus Risk Management Pvt Ltd, from FY 2009–10 to FY 2012–13. Additionally, he has provided ESSPL with services through his business. Criminal conspiracy and cheating by diverting funds of ESL, EISML and EPEL in the form of bogus capital advances with the help of Jubilant Developers & Management Services Private Limited (JDMS), Wens Agro Foods Limited (Wens Agro) SSSK Developers, SSK Developers, OSN Infrastructure & Management Pvt Ltd (OSNIPPL) and OSN Buildwell Pvt Ltd (OSNBPL), punishable under section 420 read with section 120B IPC. The pertinent allegations are as follows: Signature is not authentic Date of Digital Signature: 05.03.2023, 10:52:00 “Ashish Mittal, Ex-CFO Educomp Group” 2023:DHC:2994. The assertion that the petitioner transferred Rs. 1.50 crore to the Millennium Education Fund through his ex-director wife Poonam Mittal for the construction of a school with the name and design of „The Millennium School“ and that out of these funds Rs. 0.50 crore was received from Group-1 companies is unfounded. The SFIO further claims that Priya Prakash, the promoter Shantanu Prakash’s daughter, gave the petitioner’s wife Rs 1 crore. This was a personal loan that the promoter made. It was drawn out between October 13 and November 28, 2014, and it was entirely repaid between March 22 and February 10, 2022. There are bank statements accessible as proof.

Held:

The petitioner must hand over his passport to the learned Special Judge and is forbidden from leaving the country without his or her prior approval. The petitioner must cooperate with any additional investigations or legal actions brought by the investigating officer, if needed; 38.5 38.6.  The petitioner is forbidden from making contact with, calling, or visiting any witnesses for the prosecution or other people familiar with the case’s circumstances, whether directly or indirectly. The petitioner is not allowed to tamper with evidence or engage in any other criminal behaviour that could harm the case’s legal proceedings; and Digital Signature Not Verified Date: 05.03.2023 10:52:00 2023:DHC:2994 38.7. In addition to the aforementioned restrictions, it is expressly mandated that the petitioner refrain from contacting or transacting with any officials or employees of banks, financial institutions, companies, or other entities that are involved in the complaint in this case, whether they are located in India or elsewhere, directly or indirectly. 38.8. The Investigating Officer is further instructed to ask the Bureau of Immigration, the Ministry of Home Affairs of the Government of India, or another appropriate institution to open a “Look-out-Circular” in the petitioner’s name right away in order to stop the petitioner from leaving the country without the learned Special Judge’s approval. Nothing in this decision should be interpreted as an opinion on the merits of any pending matters.

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Judgment Reviewed by Kushala Simha