Hyderabad: The Directorate of Enforcement (ED) has apprehended Nirmal Kotecha, Pavan Kuchana, and Kishore Tapadia under the provisions of the Prevention of Money Laundering Act (PMLA) in connection with the Initial Public Offering (IPO) scam involving Taksheel Solutions Limited, a Hyderabad-based company.
Presently, Nirmal Kotecha resides in the Republic of Vanuatu, while Pavan Kuchana is in the United States. The ED launched its investigation following a complaint filed by the Securities and Exchange Board of India under section 12(A) read with 24 of the SEBI Act, 1992. The complaint implicated Taksheel Solutions Limited, its promoters, directors, and others for alleged irregularities related to an IPO involving 5,500,000 shares, each priced at Rs 10, with the issue price set at Rs 150, generating Rs 80.50 crore.
The ED officials alleged that Pavan Kuchana, Nirmal Kotecha, and Kishore Tapadia devised a carefully orchestrated strategy to inflate M/s Taksheel Solutions Limited’s revenue for the IPO issuance and subsequently divert and siphon off the IPO proceeds.
To facilitate the IPO issuance, Nirmal Kotecha arranged Inter-Corporate Deposits (ICDs) of Rs. 34.50 crore to Taksheel Solutions. Funds were circulated through US-based entities belonging to Pavan Kuchana, with circular transactions executed with Taksheel Solutions Ltd. before the IPO, leading to increased revenue and corresponding profit inflation. After the IPO, the ICDs were repaid from the IPO proceeds.
The ED investigation also exposed that, out of the IPO proceeds of Rs 80.50 crore, an amount of Rs 34.50 crore was diverted to US-based entities of Pavan Kuchana, disguised as payment for services. Subsequently, Rs 30.50 crore was transferred from these US-based entities to entities in Singapore and Hong Kong controlled by Nirmal Kotecha.
An additional Rs 23 crore was moved from the IPO proceeds to Indian entities, ostensibly for the purchase of software products, before eventually being transferred to Nirmal Kotecha’s entities based in Hong Kong and Dubai.
Proceeds of crime amounting to Rs 18 crore were transferred from Taksheel Solutions to various individuals and entities under the pretext of IPO-related expenses, vendor payments, STPI development expenses, salaries, and more, according to officials.
The three accused individuals have been presented before the Court of MSJ in Nampally, which has granted judicial custody until October 25. The investigation is ongoing.
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