In accordance with the Prevention of Money Laundering Act (PMLA), 2002, the Directorate of Enforcement (ED) detained Nirmal Kotecha, Pavan Kuchana, and Kishore Tapadia on October 11, 2023, in relation to the Initial Public Offer (IPO) scam of M/s Taksheel Solutions Limited, Hyderabad. Currently, Nirmal Kotecha and Pavan Kuchana reside in the USA and the Republic of Vanuatu, respectively.
The Securities and Exchange Board of India filed a complaint under Section 12(A) of the SEBI Act, 1992, against M/s Taksheel Solutions Limited, its promoters/directors, and others alleging irregularities with respect to an initial public offering (IPO) of 55,00,000 shares of Rs. 10 each, with an issue price fixed at Rs. 150, through which M/s Taksheel raised Rs. 80.50 crore.
According to the ED probe, Pavan Kuchana, Nirmal Kotecha, and Kishore Tapadia devised a precisely planned strategy to inflate M/s Taksheel Solutions Limited’s income in order to issue an IPO and then divert and siphon off the IPO proceeds.
Nirmal Kotecha set up Inter-Corporate Deposits (ICDs) of Rs. 34.50 Crore to M/s Taksheel Solutions Ltd. to help with the IPO issue. Before the IPO, the aforementioned funds were circulated across Pavan Kuchana’s US-based companies, and circular transactions with M/s Taksheel Solutions Ltd. were completed, which increased revenue and profitability. The ICDs were reimbursed from the IPO revenues after the IPO.
The ED probe further discovered that money was siphoned off and directed to Pavan Kuchana’s US-based firms under the guise of payment for the provision of services, totaling Rs. 34.50 crores out of the IPO proceeds of Rs. 80.50 crores. A total of Rs. 30.50 Crore was then moved from these US-based corporations to Singapore- and Hong Kong-based entities under Nirmal Kotecha’s control.
Another amount of Rs. 23 Crore from the IPO proceeds was moved to Indian corporations under the pretense of buying software products before being transferred to Nirmal Kotecha’s entities with offices in Hong Kong and Dubai. Under the guise of IPO-related expenses, vendor payments, STPI development costs, salaries, etc., proceeds of crime of Rs. 18 Crore were transferred from M/s Taksheel Solutions Ltd. to various people/entities.
On October 12, 2023, the three accused individuals will be brought before the honorable MSJ court in Nampally, Hyderabad, and will be given judicial detention till October 25, 2023. Additional research is being done.
