Court seeks RBI’s help in fraud probe


Orissa High Court today sought the Reserve Bank of India’s assistance to ascertain whether its permission was necessary to operate the firms, which had sought the court’s intervention to probe into their alleged fraudulent activities.

The crime branch’s economic offences wing had seized offices and bank accounts of seven deposit collection firms at various places across the state and kept them sealed as part of the probe. The companies had challenged it on grounds of legality. The court had undertaken analogous hearing of their petitions.

The division bench of Justice Pradip Mohanty and Justice Biswajit Mohanty directed the state counsel to take instructions from the Reserve Bank of India (RBI).

Counsel for one of the companies, Green Ray International Ltd, said the RBI’s permission was not necessary to operate the firm as it was not involved in deposit collection, but dealing with gold and silver. The state counsel, on the other hand, alleged that it had been involved in deposit collection.

The bench directed the counsel to furnish by then the investors’ details since the company had started operating in the state in 2004.

The firm had submitted details indicating 1.58 lakh investors with deposits amounting to Rs 215.45 crore. But, the state counsel said the details submitted were only from 2011.

The court earlier directed the firm to furnish its depositors’ details stating their amount and maturity value. The court gave the order after counsel for the firm had sought opening of offices and business premises to pay the depositors their due amount.

The counsel for Green Ray International Ltd alleged that the crime branch had sealed the firm’s offices dealing separately with pharmaceutical, garments and cosmetics and sought direction for opening them.

The court, however, directed the company to file an affidavit stating that no money of the investors had been diverted to the purported separate pharmaceutical, garments and cosmetics divisions. It also directed the state counsel to file an affidavit in support of his allegation that there was a nexus between deposit collection by the company and the pharmaceutical, garments and cosmetics divisions.

The state government has been opposing de-sealing of the offices and business premises during probe on the ground that it would hamper the process.

De-sealing of the offices and business premises of the petitioner companies would not be in the interest of the general public and investors as there was a strong possibility that they might resume the same business, the state government contends.