New Delhi: The Central Bureau of Investigation (CBI) has launched a probe into allegations of defrauding people of Rs 2,434 crore through a real estate investment fund, diverting bank loans to offshore entities in tax havens and fraudulent trading against Anand Jaikumar Jain, the director of Jai Corp Limited.
On 18 February, the agency booked Jain, his firm Jai Corp, its sister concern, as well as his business partner, Parag Shanti Lal Parekh, under multiple sections of the erstwhile Indian Penal Code related to criminal conspiracy, cheating, forgery and using forged documents as genuine.
Incorporated in 1985, Jai Corp is an industry giant in steel, plastic processing and spinning yarn manufacturing. Jain’s son Harish Anandkumar Jain co-founded Dream 11, a fantasy sports platform that has become one of the few unicorns in the space. Dream 11 became the lead sponsor of the Indian cricket team in July 2023.
The CBI’s case came little over two weeks after the Bombay High Court pulled up both the federal agency and Mumbai Police’s Economic Offences Wing for what it called their “reluctance” to probe a matter of national and international ramifications, stating that both agencies were “passing the buck” to each other.
The high court was hearing a writ petition filed by activist Shoaib Richie Sequeira, who had lodged two complaints against Jain and his firms in December 2021 and April 2023.
The complaints alleged that funds collected from the public were diverted for personal enrichment through the rotation of funds between his firms and the forgery of invoices to launder public money.
On 31 January, the HC ordered the CBI to constitute a Special Investigation Team (SIT) to probe the matter, which began with the registration of an FIR.
The law firm that represented Jain before the Bombay High Court refused to comment. ThePrint has reached Jai Corp via e-mail but hasn’t received a response yet. The report will be updated if and when a response is received.
Diversion of public money, bank loans to tax havens
According to allegations made by Sequeira, which form the basis of the CBI’s FIR, Jain and his partner Parekh set up two entities—Urban Infrastructure Venture Capital and Urban Infrastructure Trustees—and raised Rs 2,434 crore from the public between May 2006 and June 2008, claiming the funds were for real estate projects in Mumbai and other cities.
However, Sequeira alleged that Jain held a complete stake in both these firms, which were settlers and trustees of the Urban Infrastructure Venture Capital Fund (UIVCF) registered with the Securities and Exchange Board of India, in complete violation of the terms of the bond agreement between the fund and investors.
“In contravention of the declaration made in disclosure of interest, the accused persons thereby cheated the public at large and diverted the funds by making investments/giving unsecured loans within the sister concerns,” the FIR states.
Moreover, it was alleged that Jai Corp’s sister concern showed unsecured loans as losses over the years based on forged documents to justify construction projects.
It was further alleged that Jain transferred all or part of the Rs 2,434 crore collected from investors, along with all or a portion of Rs 3,252.11 crore from bank loans between 2006 and 2007, Rs 686 crore from loans between 2003 and 2004, and Rs 98 crore in loans between 2008 and 2009 to incorporate firms in offshore tax havens such as Mauritius and Jersey Channel Islands.
The complainant further alleged that money from the same channels was used for the fraudulent trading of futures of Reliance Petrochemicals, a Reliance Industries group company.
The FIR concluded with the allegation that Jain’s firm forged invoices in the name of exports to firms based in Australia’s New South Wales and California to launder money further.
As directed by the Bombay High Court, the CBI has constituted an SIT headed by a Deputy Inspector General-rank officer to investigate the allegations.
(Edited by Sugita Katyal)
Also Read: Faceless assessment ‘scam’: How nexus of I-T officers & CAs rigged the system to net big fish
The Gujjus, Jains and Marwaris are taking the nation for a ride. And the Union government seems helpless.
The ED needlessly persecutes Opposition leaders. Ideally, it should be focusing on these corrupt uber-rich businessmen.