New Delhi: The Connaught Place Police station in the Capital registered an FIR earlier this month against a former CEO of Imported Coal Division (ICD) of Karam Chand Thapar & Bros. (Coal Sales) Ltd. (KCT India) and his wife; Ambit international FZE, a Dubai based company and its promoter; and others, on the charge of siphoning away of funds through alleged sham mechanism of brokerage and conversion of KCT’s assets to personal use.
KCT India is the largest coal logistics company in India. The company transports between 60-70 million metric tons of coal annually across the country by road, rail and sea. The KCT Group has interests in sectors ranging from coal and real estate to aquaculture & manufacturing.
Besides the basic complaint that wrongful loss of at least Rs. 5.70 million has been caused to the complainants – KCT India, and KCT Global PTE Ltd. (KCT Global), a private limited company incorporated in the Republic of Singapore -the other charges levelled against the accused include criminal conspiracy, criminal breach of trust, forgery of a valuable security and use of fabricated documents as genuine. These are covered under Sections 467, 468 and 471 of Indian penal Code read with 120-B for the creation and use of fabricated valuable securities as genuine (for purposes of cheating KCT). Few of the accused also face allegations that that, if proved, are punishable under Section 120-B/109 read with Section 409 IPC.
The main accused, Rajesh Thapar was appointed as the CEO of Imported Coal Division of KCT India in September 2013. Shortly after his appointment as CEO, KCT Global had passed a Board Resolution to grant General Authority to Rajesh Thapar and his team to negotiate and execute contracts on its behalf in relation to the company’s imported coal trading business.
During his tenure as CEO of ICD, which ended in January 2017, Rajesh Thapar, along with his team that was recruited by him, handled KCT’s imported coal trading business, and was responsible for all commercial decisions connected with it, including specifically, entering into contracts with third parties for sale, purchase of coal, vessel chartering, brokerage and commission, and other related matters.
Rajesh Thapar’s team in ICD, KCT India, included Prashant Garg, Deepak Sharma and Om Jee Kesavani. All of them had worked with Rajesh at is previous place of employment.
Rajesh Thapar and his team were given the authority over KCT’s properties. They were even authorised to create financial obligations and liabilities to third parties on the company’s behalf. They received handsome monthly remuneration and perks. Rajesh Thapar was paid more than Rs. 10 million annually as salary.
The complainants have told the police that Rajesh Thapar had entered into sale and purchase transactions of an aggregate value of over Rs. 10 billion on behalf of KCT. However, despite the large volume of business “on paper”, the companies suffered substantial losses. “These losses were attributable in large part to the unhealthy business practices adopted by Rajesh Thapar and his team, i.e., transacting with parties known to them to be dubious and un-creditworthy, on a “credit sale” basis, as a result of which KCT had outstanding debt of almost Rs. 2 billion by mid-2015, which it has struggled to recover till date”, its been recorded in the FIR.
The complainants have told the Police that when pressure was mounted on Rajesh Thapar to recover the debts, he resigned from KCT’s service in October 2016.
It is recorded in the FIR that as part of their day-to-day functions, Rajesh Thapar and his team would identify a particular sale and purchase transaction, meet with vendors and suppliers, negotiate the commercial terms, etc. and be responsible for the profitability of the transaction. They would identify intermediaries, including brokers, commission agents, etc. and would also decide the amount of commission payable to them. It was understood throughout that brokerage would be paid to genuine and reputed brokers who enabled the transaction. Under no circumstances was it contemplated that Rajesh Thapar or his associates would extract brokerage and commission out of KCT for any such transaction, since he was already paid a salary for such work.
The lid was off after KCT paid a sum of USD 89,202 (equivalent to approx Rs. 5.70 million) as “brokerage” or ”commission” to to Ambit International FZE, a Dubai based company in relation to multiple sale/purchase transactions.
Subsequent inquiries revealed that Ambit is owned and controlled by one Arvind Bohara, who is an old friend and associate of Rajesh Thapar during the period between 2006-2010 when they worked for another company.
It is alleged that Arvind Bohara deposited more than Rs. 1.90 million into the joint bank account of Rajesh Thapar and his wife Deepa Thapar (in HSBC Bank) between December 2014 and October 2015. The said transfers allegedly were made on strength of false and fabricated invoices allegedly raised by Rajesh Thapar’s wife on Ambit. The complaint lodged with the Police says that the accused were operating in collusion with each other in order to share the proceeds of their criminal activities through Ambit.
Inquiries have further revealed that a significant part of the “brokerage” paid by KCT to Ambit was transferred to Rajesh Thapar and his wife. The said transfer has also been made on the strength of false and fabricated invoices allegedly raised by Rajesh’s wife on Ambit for “brokerage-cum-liaison fee for doing liaison work and arranging business contacts on your behalf for business in India”. Invoices and other documentation reflecting such transfer were recovered from the office of Rajesh Thapar.
The complainants also suspect that Rajesh Thapar allegedly employed this modus operandi to commit criminal breach of trust and cause wrongful loss to KCT in relation to several other transactions executed by him during his tenure, with the active aid and abetment of his family members/close associates.
Significantly, payments of tens of millions were made in the name of brokerage and commission to multiple third parties during his tenure.
The allegations and criminal culpability notwithstanding, it is strange that the company, which is supposed to be run professionally, allowed Rajesh Thapar to resort to “unhealthy business practices over a long period of time. during his tenure as CEO, he was allowed to enter into sale and purchase transactions to the aggregate value of over Rs. 10 billion while the company’s debt rose to Rs. 2 billion. The lid was off only when he resigned and the alleged sham dealings with Ambit international FZE of Dubai were uncovered.
The KCT Thapar Group is headed by Vikram Thapar. He is the grandson of the founder of KCT Group late Karam Chand Thapar. His cousin, Gautam Thapar is the founder of Avantha Group.
Avantha Group was in news in April 2015 when the Delhi Police had arrested Jaspal Singh, the head of Corporate Affairs of Ballarpur Industries Limited, a Thapar Group company, for making extortion calls to a director of Thapar – Avantha group demanding Rs 250 million for selling out a power plant to Adani Group for Rs 40 billion.
The top corporate executive, who received the extortion calls was a member of the corporate representatives’ delegation on a three-nation tour with Prime Minister Narenda Modi.