The Enforcement Directorate (ED) has got 13-day custody of Nirmal Kotecha, Pavan Kuchana and Kishore Tapadia from a Hyderabad court after they were arrested for their alleged involvement in Taksheel Solutions Limited’s Initial Public Offer (IPO) scam. The agency said that its probe revealed that the Hyderabad-based Taksheel Solutions has allegedly misled the public by suppressing vital information and offering factually incorrect statements in its IPO prospects and subsequently diverted proceeds earned it.
The three accused were arrested on October 11 and were produced before a Court in Nampally, Hyderabad which remanded them to ED custody till October 25, the agency posted on X. “Nirmal Kotecha and Pavan Kuchana are presently residents of Republic of Vanuatu and USA respectively,” it stated.
Fraud strategy
The probe, said the agency, “revealed that Pavan Kuchana, Nirmal Kotecha and Kishore Tapadia formulated a meticulously planned strategy to inflate the revenue of Taksheel Solutions Limited for issuing IPO and for subsequently diverting and siphoning off the IPO proceeds. To facilitate the issue of IPO, Nirmal Kotecha arranged Inter-Corporate Deposits (ICDs) of ₹34.50 Crore to Taksheel Solutions Ltd”.
The anti-money laundering agency charged that the funds were rinsed through US-based entities of Pavan Kuchana and circular transactions were done with Taksheel Solutions Ltd. before the IPO which resulted in incremental revenue and corresponding inflation of profitability. Subsequent to the IPO, the ICDs were repaid from the IPO proceeds, the probe highlighted.
Of the IPO proceeds of ₹80.50 crore, an amount of ₹34.50 crore was siphoned off to US-based entities of Pavan Kuchana on the plea of payment for the supply of services, the ED alleged. From these US-based entities, an amount of ₹30.50 crore was further routed to Singapore and Hong Kong-based companies under the control of Nirmal Kotecha.
“Out of the IPO proceeds, another amount of ₹23 crore was transferred to Indian entities in the guise of purchase of software products and was eventually transferred to Nirmal Kotecha’s entities based in Hong Kong and Dubai. Proceeds of the crime of ₹18 Crore were transferred from Taksheel Solutions Ltd. to various individuals/entities on the pretext of IPO-related expenses,” among others, the agency charged.