Mumbai: The Central Bureau of Investigation (CBI) has urged the Bombay High Court to dismiss a petition filed by Jai Corporation Ltd challenging its probe into alleged financial irregularities worth over Rs 3,000 crore involving the company and its chairperson, Anand Jaikumar Jain. The HC took the CBI’s reply on record and directed the company to file a rejoinder. The matter will now be heard after four weeks.
The court was hearing the matter on Wednesday, following the Supreme Court’s dismissal on March 17 of Jai Corp’s appeal challenging a High Court order passed on January 10. In that order, a bench headed by Justice Revati Mohite-Dere had constituted a Special Investigation Team (SIT) to investigate the alleged fraud, expressing serious concern over the “reluctance” of both the Mumbai Police’s Economic Offences Wing (EOW) and the CBI to pursue the matter.
The SIT was ordered based on a plea by public rights activist Shoaib Richie Sequeira, who alleged large-scale misappropriation of public funds, investor fraud, and money laundering by Jain and his companies. He initially filed complaints with the EOW in December 2021 and again in April 2023, outlining allegations such as round-tripping through shell companies, unsecured advances, and fraudulent stock futures trading.
The EOW, instead of initiating an investigation, referred the case to the CBI, citing its transnational implications involving jurisdictions like Mauritius, the US, Australia, and the UAE. The CBI, however, refused to take up the matter, arguing it fell within SEBI’s domain. Notably, SEBI had earlier imposed a Rs30 crore penalty on two entities linked to Jain for irregularities in futures trading.
The High Court criticised the agencies’ approach, stating, “We as a Constitutional Court cannot remain a mute spectator when it becomes apparent that the agencies are passing the buck.”
Sequeira alleged that public and investor funds amounting to thousands of crores were siphoned off through various channels, including fake export invoices and diversion of foreign currency loans.
He also cited SEBI’s forensic audit of the Urban Infrastructure Venture Capital Fund, which revealed irregularities in the winding up of schemes, demanding a full forensic investigation to uncover the scale of financial misconduct.
