SC slams Sebi for 'double standards' in Indiabulls probe, Pg4

Key Highlights:

• The Supreme Court criticized SEBI for alleged double standards in the Indiabulls Housing Finance Limited (IHFL) probe, now known as Samman Capital Limited.
• The court questioned SEBI's reluctance to investigate alleged round-tripping of funds, violations of the Companies Act, and siphoning of funds by IHFL's promoters.
• The court also expressed surprise at the CBI's seemingly lenient approach to the case, emphasizing the significant public interest involved.
• The court directed the CBI to file a fresh affidavit after the Additional Solicitor General assured that a fresh complaint would be filed.

Detailed Insights:

• The petition filed by the Citizens Whistle Blower Forum sought a Special Investigation Team (SIT) probe into the charges against IHFL.
• Allegations against IHFL include providing questionable loans to firms with minimal net worth, which then funneled the money back to businesses owned by their promoters.
• The court questioned why the Ministry of Corporate Affairs was allegedly closing matters related to violations mentioned in a SEBI report.
• The court observed that even if a small percentage of the allegations are correct, the large-scale transactions could be dubious, warranting the registration of an FIR.
• During a previous hearing, the defense argued that the petition was a copy of a dismissed plea and a case of blackmail, stating that seven agencies had already investigated and dismissed the allegations.

Key Concepts Involved:

• Round-Tripping: Illegally transferring money out of a country and then back in, disguised as foreign investment.
• Siphoning of Funds: Illegally diverting funds from a company for personal use or other unauthorized purposes.
• Predicate Offence: A crime that is a component of a more serious crime, such as money laundering.