Green Earth Resources lands in SFIO net for cooking of A/C books

The serious fraud investigation wing of the ministry of corporate affairs has pointed out serious discrepancies in the books of Green Earth Resources, the company which was formerly known as Austral Coke and Projects Limited.

Kolkata-based coking coal company, Green Earth Resources earlier known as Austral Coke has come under the scanner of Serious Frauds Investigation Office (SFIO).

While it was SEBI that banned the company from accessing the capital markets in 2009, it is the turn of Serious Frauds Investigation Office under the Ministry of Corporate Affairs to raise an alarm.

SFIO in a report submitted to the MCA on Dec 30, 2011 has accused the company of fraud.

SFIO has recommended prosecution of the promoters of Green Earth Resources Rattan Lal Tamakhuwala and Rishi Raj Agarwal  as well the statutory auditors of the company  under the Indian Penal Code  with charges including criminal conspiracy, cheating and criminal breach of trust .

The investigation also reveals fake transactions of Green Earth with Nikhil Group showing artificial inflation of turnover and profits which reflected in the IPO prospects filed by the company.

The investigation has also revealed false invoices against hiring of machinery.

SFIO was investigating sale/purchase transactions of Green Earth Resources and authenticity of financial statements from 2005 till 2010.

On being contacted, Green Earth resources said, "The company has not received any communication either from SFIO or the Ministry of Corporate Affairs in this regard and therefore we are not in a position to comment upon the same."

Green Earth Resources raised Rs 142 crore through IPO in August 2008 but subsequently both the IT department and RoC had found several violations in its financial accounts.

And misusing the funds raised through the IPO has also been a major charge against the company, a practice that is found to be quite common and coming under the regulator's scanner.

Diversion of funds raised through IPO is not limited to a few companies. In fact last month, market regulator SEBI came down heavily on promoters of 7 recently listed firms and 3 banks for misuse of IPO money.

Meanwhile MCA will now have to take a final call on the SFIO report against Austral coke and ask the investigating authorities to proceed against it.