Govt orders SFIO probe into Austral fraud case

Asked to submit report within seven months

“The Serious Fraud Investigation Office (SFIO) has been asked to submit its report on the enquiry into Austral Coke within six months and seven officers have been designated for the probe,” a Corporate Affairs Ministry official said.
The Ministry, he added, has found ‘prima facie’ evidences of fund diversion, manipulation of accounts, and tax evasion by the company. Austral Coke did not respond to calls and email queries from PTI. Sebi in September 2009 had barred Austral Coke from raising fresh equity after the Income Tax Department unearthed an alleged over Rs 1,000-crore fraud in the company’s transactions.
The SFIO probe, the official said, would be carried out under Section 235 of the Companies Act under which the investigating agency can call for information or explanation from the company.

The Sebi order had come ahead of Austral Coke’s board meeting on September 3 to consider raising about Rs 960.22 crore through private placements with institutions.
Conduct raids
The market regulator had said the I-T Department in June had conducted raids at the business and residential premises of Austral Coke and found ‘bogus’ transactions to the tune of Rs 1,048 crore.

The I-T Department, Sebi had also pointed out, had observed that a part of the Rs 142.29 crore raised by the company last year through an IPO had been used in fraudulent manner.
“Such purchases identified so far by the I-T Department totalled up to Rs 553 crore.The company has also shown sales of around Rs 495 crore.which apparently were bogus,” the order had said.
Press Trust of India