‘Ghost investors’ surprise ED

KOLKATA: A week after Rose Valley chairman Gautam Kundu was arrested, the central investigating agency on Thursday filed charge sheet in the Rose Valley case against six persons. The agency also filed a separate application for further investigation into the case.
Enforcement directorate has named five persons apart from Kundu-namely Shibamay Dutta, B K Mullick, Ashok Saha, Arun Mukherjee and Ramlal Goswami for their alleged involvement in raising money from the market.ED officials, who have termed the entire money raising process as illegal, have termed the some of the investors as ghost investors. Present at the court of judge-I G C Karmakar at the City Sessions Court, ED lawyer Bhaskar Prasad Bandyopadhyay prayed for taking cognizance of the chargesheet.
While Ramlal Goswami and Ashok Saha are former directors of the company, Arun Mukherjee is a former development officer. The central investigating agency has already interrogated Shibamay Dutta, the managing director of the company and B K Mullick former company secretary. During interrogation both Dutta and Mullick had said that money was mobilized through issuing non-convertible debentures and were then deposited in several bank accounts of the Rose Valley Real Estate. Those accounts were also used to deposit money collected from other schemes.
During investigation, ED officials found that while funds have been mopped up for a specific project, it was later diversified and utilized in other businesses. Based on a Sebi complaint ED registered the case on February 27 last year where it found that Rose Valley Real Estate raised Rs 12.82 crore from the market by issuing debentures to 2,585 persons during 2001 and 2008.
According to ED officials, the Rose Valley episode is gradually turning into a case of ‘ghost investors’ and ‘fictitious investments’. It is a case where some of the investors made payments only on paper, felt ED officials. According to sources, the agency has so far sent summons to at least 25 persons of which only six have turned up so far. “We have seen that in many of the cases the purported investors had not invested anything. When asked they confirmed that no money was invested in the company although their names appear as debenture holders,” said an ED official. Investigators also claimed that in some cases summons sent to investors came back which casts doubt on the actual existence of the debenture holders.
The investigators think that while Gautam Kundu master minded the entire money raising scheme, he was assisted by the five others named in the chargesheet. “They worked hands in glove in framing the schemes and raising money from people,” an ED officials said. At court Rose Valley lawyers had earlier argued that the debentures were private placements, but ED lawyer Abhijit Bhadra said that Sebi norms were violated during placements and it can be termed as public placement actually.
“Neither did they meet DIP requirements, nor did they file any red herring prospectus with Sebi,” said an ED official. After five days of ED custody, Kundu was remanded to 10 days' jail custody on Tuesday.