Puneet Dalmia Remains Blue-eyed of Modi Govt. Several Cases Being Probed by Central Indian Agencies

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By Arup Chanda,  Copy Edited by Adam Rizvi, USA, TIO:  Puneet Dalmia is a suave man with an impeccable background being a graduate of IIT Delhi and IIM Bangalore. Dalmia who owns Dalmia Bharat Cements Limited has created a record of sorts in the world by obtaining the lease of the Red Fort unprecedented in Indian history but has several central agencies probing him for alleged financial irregularities amounting to thousands of crores of rupees.

If there are baroque architectures that epitomize India, then Red Fort, the 16th-century-fort of red sandstone from whose pedestal consecutive Indian prime ministers have been addressing the nation, certainly fits the frame perfectly along with the famous Taj Mahal, built by the same Mughal emperor Shahjahan, whose lineage is highly despised by the Hindu nationalist Bharatiya Janata Party (BJP) of present Prime Minister Narendra Modi. But then, this very Red Fort has been leased to the Dalmia Bharat Group under the “Adopt a Heritage” project of the Archeological Survey of India since April 2018. As the Red Fort’s branding now comes with the Dalmia Bharat Group’s logo. The very Dalmia group, owned by Dalmia has been allegedly involved in gross financial irregularities and scams. It is alleged that his proximity with the BJP and the Modi dispensation is preventing the government agencies from taking any action against him. So much for Modi’s crusade against corruption that one of India’s famous monuments now belongs to one of the controversial and alleged corrupt tycoons of the country.

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Dalmia has been under the scanner of the Enforcement Directorate (ED), the Central Bureau of Investigation (CBI), the Serious Fraud Investigation Office (SFIO) and Securities and Exchange Board of India (SEBI) for his financial irregularities, which took a prominent shape since the last one decade. Yet, by misusing the law, exerting pressure using his clout and by sheer money-power, Dalmia managed to stay aloof from the claws of the law.

To know what this man, whose company has got the prestigious Red Fort on a lease, has in his kitty, one has to look for the allegations against him and how none of the cases could reach any conclusive end but a dicey status quo is maintained in each of them through some unseen intervention.

Puneet has a family history. His grandfather Ramkrishna Dalmia was the first industrialist in India to be jailed being charged under Section 420 of the IPC which means cheating. And then his cousin Sanjay Dalmia was also arrested on the same charges last year. An industrialist who knows Puneet said, “This seems to be running in the DNA of that family. There was no need of Puneet who we thought to be a gentleman to commit such violations of the law.”

Despite repeated calls to his mobile and office telephone landlines, there has been no response from Puneet Dalmia.

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Dalmia’s Share Scam in Collaboration with AFS

Dalmia got entangled in a major share scam, which caused a huge ignominy to the company. Having met Awanish BGV 8Kumar from Allied Financial Services (AFS) through his father-in-law SS Poddar, Dalmia offered him a chance to invest dead resources of his company in share trading to earn a margin. Late January 2019, Dalmia offered his own shares worth Rs 7 billion as security but they could not be used as these companies were under merger and, therefore, the transfer was in abeyance and could not be affected.

Then Dalmia got hold of Rs 3.5 billion worth mutual funds of his company, which he demated without the knowledge of the board. Such trading through Mishra got Dalmia more than Rs one billion profit in his private companies using the securities of other companies to buy share pledged for his private trading surreptitiously.

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The internal auditors and statutory auditors of Dalmia Bharat Group didn’t find that securities worth Rs 3.5 billion in mutual funds were pledged by Dalmia for his private trading without the consent of the board of the company. It was only when an external auditor, in late 2018, insisted to physically check the securities, which were not found and Dalmia was visibly embarrassed over such an ignominious incident. As a face-saving measure, he filed an FIR against Mishra and the AFS, accusing them of swindling the securities of the company using fraudulent methods. On December 28th, 2018, the Dalmia Bharat Group requested to redeem the securities; on January 16, 2019, the Dalmia Bharat Group lodged a complaint with the National Securities Depository when they were unable to redeem the securities and on January 28, 2019, the company was told that there were no securities.

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This made Dalmia Bharat Group allege that AFS has stolen the securities worth Rs 3.44 billion of the company and Rs 220 million of Novjoy Emporium Pvt Ltd. It was alleged that the AFS under Mishra had transferred the securities fraudulently to the IL&FS Securities Services (ISSL) as collateral. However, Mishra, through an affidavit at the Supreme Court, has given a forensic audit report tallying the DIS signatures of the authorized personals of the Dalmia Bharat Group pledging the securities. The Dalmia Group refused to acknowledge the forensic investigation, claiming it was done by not seeking the official signatures from the company, but by referring to photocopied documents of the company.

Now Mishra could not have forged all signatures to use the securities for trading on his own unless Dalmia himself wanted that. The Economic Offence Wing of the Delhi Police began investigating the allegations and arrested Mishra in August 2019. However, at the same time, while Mr. Dalmia passed the buck of missing securities on the AFS by lodging an FIR, the retail investors have been asking why Mr. Dalmia opened multiple Demat and demat-cum-trading accounts with AFS if there was no personal gain for him from these tradings? The investors alleged that there were fund transfers, probably profit from trading, from AFS to company accounts associated with Mr. Dalmia.

A Scared ED? 

Though the ED has been unleashed by the Modi regime to force many of its opponents to fall in line, the only person whom the ED could not do any harm is Dalmia. In 2011, the Income Tax Department raided Dalmia, which ultimately resulted in the CBI filing an FIR and ultimately a charge sheet against him in 2013. This is a very serious charge sheet giving evidence of the bribe paid to late BCCI chief Jagmohan Dalmia and tracing all the money transacted through hawala and other routes to the tune of Rs 1.5 billion.

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Even though the ED decided to file a charge sheet against Dalmia in the same case, in all these seven years, the clout of the accused or any unknown reason prohibited the agency from even filing the charge sheet, forget prosecuting. Why the ED has failed to file a charge sheet in the case in seven years? What stopped it from pursuing the case to a conclusion when it’s proactively taking up steps against various opposition-linked politicians and business houses?

Dalmia vs the CBI

The CBI filed charge sheets against Dalmia in 2013. For the last seven years the trial has been dragging on at a CBI court in Hyderabad but it seems to be heading a blind lane. After his appeal to be exempted from remaining present during the hearing on every Friday was quashed by the trial court and the Andhra Pradesh High Court, Dalmia approached the Supreme Court through his advocates Mukul Rohtagi and Neeraj Kishan Kaul seeking exemption. On December 16, 2019, a Supreme Court bench of justices Ashok Bhushan and MR Shah granted him exemption from personal presence in the hearings.

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Even though the long charge sheet presented in the case is itself self-explanatory, the trial in the CBI court has been delayed extra-ordinarily to the scrutiny of balance sheets. This is allegedly a replication of international tactics to delay prosecution done to make the cases less sensational and lose the limelight.

Dalmia’s way out with MCA and SFIO 

In June 2016, two years before he got his Red Fort lease, a complaint was filed in the Ministry of Corporate Affairs (MCA) against Dalmia for several fraud cases. The then secretary assured the complainants of swift inquiry but even after three years, no steps were taken to investigate the allegations against Dalmia. Apart from the existing CBI and pending ED charge sheets against Dalmia, the MCA was also told about the serious cases of fraudulent practices and economic offenses pending against him.

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The SEBI case of rigging share prices was also reported to the Registrar of Companies also. Dalmia allegedly rigged the prices of his company’s shares worth Rs 6 billion to Rs 15 billion over a period of 15 months. Before the crime occurred, written complaints were given to cite how such crimes are committed and the opinion of company law experts was given on the modus operandi. The MCA found it a perfect case to be investigated by the SFIO and the file was forwarded to the then finance minister late Arun Jaitley. Upon receiving the file, Jaitley asked why the complaint could not be investigated by the ROC itself, rather than the SFIO.

It is alleged that the complaint lodged with the MCA and the proposal of investigating the allegations are lying in a frozen state under the influence of GN Bajpai, a former SEBI chief, who is associated with the Dalmia Group. Bajpai, despite being found involved in the erstwhile Kingfisher Airlines scam by the SFIO, was appointed as a director in the IL&FS board. Dalmia is allegedly using Bajpai to shield himself from the investigations of the SEBI, ROC, and SFIO now.

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Even though Mishra and the AFS have placed much evidence that can map Dalmia with the scams, it is unlikely — due to his proximity with the Modi regime and hobnobbing with the BJP — that he will be convicted or even prosecuted properly in any of these cases. This will pave the doors of opportunity wider for this crony capitalist who will use his influence to rig the system, dupe investors, and manipulate figures with impunity. While doing these, Dalmia still retains one of the crucial signs of India’s identity — Red Fort — and will eventually transform the narratives around his controversy-encircled ventures in his favor.

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Curated By Maham Abbasi