The Hindu Business Line : Mukta Arts: CLB gives nod for further probe

THE Company Law Board (CLB) has given its nod to the Government to investigate further into the affairs of Mukta Arts Ltd, the production house that has rolled out movies such as Taal, Hero, Karma and Khalnayak.

The CLB has ruled that the company has gone beyond the main objectives for which it was set up with its trading activities in the stock market.

It had made investments of Rs 83.41 crore in the shares of certain companies during the period of investigation by the Ministry of Company Affairs. The genesis of the huge investments made by the company in the share market when it is not in that business needs to be probed, the Board said, adding that it was, however, difficult to see from the documents placed on record whether there was any relationship in the transactions with the Ketan Parekh Group (KPG) entities.

The company had submitted that shares bought by KPG companies were through the stock exchange or public issue or from shareholders of the company in the normal course of business.

There were no direct transactions between the company and KPG.

Armed with the CLB order, the Ministry is set to refer the case to Serious Fraud Investigation Office for investigating further into the company's affairs.

The Ministry had approached CLB, seeking clearance for investigations into the company, based on the report submitted by its inspecting officer.

As per the report, numerous violations of the Companies Act by the company had been found.

It has been alleged that the company had given loans to one of its directors without proper compliance with the requirements of the Act.

It was also found that the shares of Mukta Arts, which became a public limited company in March 2000, had been allotted to KPG companies.

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