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Mohnish Pabrai, a famous value investor tried to buy a stake in KRBL from one of the existing investors – Omar Ali Balsharaf. However, the Enforcement Directorate (ED) accused Balsharaf of buying the KRBL shares using crime money which he got from the VVIP chopper scam. Due to this the deal was not closed.
Balsharaf filed a case in the Delhi High Court. The High Court concluded that Balsharaf who is the distributor for KRBL products in Saudi Arabia had acquired the stake in 2003. However the crime had been committed five years later in 2008. These meant that the ED officer was lying.
It is alleged by ED that Gautam khaitan (Independent Director of KRBL between July 2007 and April 2013) has been the beneficiary of Rs 850 Cr in various defense deals, a part of which has been routed through a step-down subsidiary of KRBL – RAKGT. Gautam Khaitan was made to resign as soon as his name appeared in the scam, no charges has been pressed against the KRBL management.
It was found that the promoters and directors of KRBL, DMCC transferred shareholding in the name of Anurag Potdar, the nephew of the promoters of KRBL Limited.
The KRBL management claim that they had no ties with RAKGT and it is run by its nephew.
KRBL only provided a way to route the crime money and the amount was much lesser than the total amount involved in the scam.
Embraer Case – Attachment of property
When ED failed to make progress in VVIP chopper scam, it took to another scam – the embraer case. The ED alleged that KRBL had land property worth Rs 15 Cr which it believed was bought using crime money. The KRBL management engaging in a scam for a small amount of Rs 15 Cr seems bizarre.
8th Feb 2019:
The IT department disallowed expenses of Rs 2221 Cr and raised a tax of Rs 1270 Cr. Rs 1996 Cr of these expenses was for paddy purchases made from the farmers. KRBL management claimed that there are different method of paddy purchases in different state. It said that purchases from farmers disallowed as expenses by the IT department actually directly purchases from Uttar Pradesh farmers.
Management also had the Mandi Receipts. For the procurement they had done directly from the Uttae Pradesh farmers.
13th Mar 2020
The KRBL management was vindicated on appeal and the tax demand notice was reduced to Rs 101 Cr.
All these gives us a picture that KRBL management is fair in its conduct and any claims on the company seem to be wrong.