The Hindu Business Line : DCA submits Daewoo Motors investigation report to Jaswant

THE Department of Company Affairs (DCA) is said to have submitted the investigation report by the Serious Fraud Investigation Office (SFIO) on Daewoo Motors India Ltd to the Finance Minister, Mr Jaswant Singh.

The investigation against the carmaker was the first case referred to the office, an agency set up for looking into serious corporate frauds.

Daewoo has been mired in litigation ever since its parent's takeover by General Motors, which however, did not include the Indian operations. Refraining from disclosing the findings of the investigations, sources told Business Line, "Any action on the recommendations will be taken only once the department has examined the report. The entire process of examination will take a minimum of a month."

SFIO, which had fixed a tight time schedule to complete its work, has submitted the report in three months, sources said. DCA had referred the case to investigation office on complaints received from the bankers of Daewoo India.

The complaint against the company that the office was asked to investigate included siphoning and diversion of funds, improper invoicing and manipulating accounts. The company is stated to have understated its losses in the past. Further, the assets of the company are currently with the court receiver.

According to sources, the amount involved was close to Rs 3,000 crore. Of this amount, Rs 1,240 crore is owed to financial institutions (FIs) such as ICICI Bank, IDBI and Exim Bank. In fact, before referring the matter to investigation office, the department had invited presentations from independent investigators for outsourcing investigations for the case.

According to sources, "in cases like this, multiple investigations are required". In fact, the investigation office team had been visiting the Daewoo site regularly. Probes also included investigations into affairs of the company and the role of the management.

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