BSP MLC Mohd Iqbal's 111 family firms had no biz yet showed outflow of Rs 889 crore

NEW DELHI: Statistics presented to the Supreme Court on Monday about the finances of 111 companies controlled by BSP MLC Mohd Iqbal and his family members by the Serious Fraud Investigation Office (SFIO) would intrigue the best of management and finance gurus.

In its affidavit through additional solicitor general Maninder Singh, SFIO informed a bench headed by Chief Justice T S Thakur that these companies, with a share capital of Rs 84.39 crore, had no substantial business but attracted huge share application money of Rs 118.73 crore and share premium of Rs 256.95 crore.

"Out of 111 companies, 85 have share capital of Rs 1 lakh each," it said. If attracting such huge money without having any business could puzzle financial experts, details about the balance sheets would surely make them scratch their heads in disbelief. "Outflow of funds as per last balance sheets of all 111 companies appeared to be Rs 889.24 crore, of which Rs 526.71 crore is invested in land and inventories, Rs 137.15 crore in group companies and Rs 160.15 crore was given as loans and advances," it said.

Financial statements of all 111 companies were managed by a single statutory auditor, Jitender Kumar Sharma. "On the basis of financial statements submitted to the Registrar of Companies, it is revealed that 21 companies have been identified in which major transactions of around Rs 800 crore have been made," the SFIO affidavit filed by additional director Harpreet Kaur said.

ASG Singh sought and got three months more time to fully investigate the companies. He told the court that most directors of the companies, who were close relatives of Mohd Iqbal, did not join further investigation and furnished required documents while seeking more time citing Ramzan last month.

Singh also presented the affidavit of Enforcement Directorate to the bench and said the agency had found preliminary evidence of National Rural Health Mission (NRHM) scam money being laundered through some of these 111 companies.

Substantiating SFIO's findings, the ED said between 2008 and 2011, a large number of companies were taken over or promoted by Mohd Iqbal's family members and associates and large funds were transferred into these New Delhi-based firms.

"The chartered accountants, middlemen and companies that have been used to infuse huge funds in the companies taken over or promoted by Mohd Iqbal's family members have been found involved in the conversion of money in the NRHM scam," the ED said.

"Iqbal's family members have remitted funds from their personal bank accounts to the tune of Rs 14 crore in the companies controlledpromoted by them. It was noticed that the entire sum of approximately Rs 14 crore remitted to these companies was deposited in their bank accounts by Iqbal's family members in cash for which explanation is being examined," the ED said.