Sesa Goa gets govt letter ordering probe into company

"On October 28, 2009, the company received a copy of an order dated October 23, from the Ministry of Corporate Affairs of the Government of India ordering an investigation by the Serious Fraud Investigation Office (SFIO) into the affairs of the company and that of its subsidiary, Sesa Industries Ltd," Sesa Goa said in a filing to the Bombay Stock Exchange. SFIO, the investigative wing of the Corporate Affairs Ministry, would probe into the alleged irregularities in the book of accounts of Sesa Goa.

"The scope of investigation include looking into the state of affairs of the company and its subsidiary Sesa Industries Ltd, in respect of mismanagement, malpractices, financial and other irregularities," Sesa Goa added. The investigation is scheduled to be completed within six months from the date of the order — October 23, 2009.
Following the announcement shares of the company plunged as much as six per cent in morning trade on the BSE. It was later quoted at Rs 288, down 2.62 per cent on BSE. Sesa Goa added "the company and its management are committed to the highest levels of corporate governance and transparency and will fully cooperate with the (enquiry). The company continues to conduct its business in full compliance with all applicable laws and regulations."

Terming the inspection of books of the company as a "normal procedure," Corporate Affairs Minister Salman Khurshid on Wednesday said, "These (inspections) are procedures that have to be followed before taking a final decision. Decisions are taken after some reports...whatever reports (SFIO report) come."

On October 27, Corporate Affairs Ministry officials had said Sesa Goa was "prima facie" found guilty by the Registrar of Companies (RoC) of fudging invoices. The RoC, which had been investigating the case since early 2003, submitted its report on Sesa Goa early last week. Meanwhile, another case pertaining to merger of Sesa Goa, the country's leading iron ore producer, with its subsidiary Sesa Industries is pending before the Supreme Court. The London-based Vedanta Resources in 2007 had acquired a 51 per cent controlling stake in Sesa Goa from Mitsui & Co, for USD 981 million.

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