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RBI exposes misleading ads of Kuber Group, HC issues notice

A judge of the Delhi high court on Thursday issued notices to three financial companies of the Kuber group on an application of the Reserve Bank of India which alleged that the companies had attempted to mislead the court and the public through certain advertisements in newspapers.

Justice Anil Dev Singh issued notices to Kuber Mutual Benefits Limited, Kuber Finance (India) Limited and Kuber Auto General Finance and Leasing Limited, after the RBI objected to the advertisement published in newspapers of New Delhi and Lucknow.

The judge directed the companies to file their replies by the next date of hearing on December 10.

The judge also directed transfer of the case to the division bench dealing the case of Acting Chief Justice Mahinder Narain and Justice Mukul Mudgal.

Raising the objections to the advertisements, the RBI in an affidavit said it was not true to state that the bank had given the Kuber group a clean chit and had inspected all the three companies as per the directive of the court.

The application said that by issuing the advertisements stating that the matter printed in them were as per the RBI statements made before the court, the Kuber Mutual Benefits Limited had attempted to mislead the public and the court.

Meanwhile, in a report listing the financial position of Kuber Mutual Benefits Limited till August 31, the RBI has revealed that the realisable value of assets of the company exceeds its total outside liabilities by Rs 9.1 million and the company was deemed to be solvent.

The total outside liabilities of the company were Rs 2.11 billion, the realisable value of assets was Rs 2.12 billion, the report said.

The application prayed that the company should be directed to rectify the same by issuing of another advertisement immediately at least in two Hindi and two English newspapers besides in newspapers where the advertisements had appeared.

The RBI wanted that the company should extend an unconditional apology to the court and also the general public for issuance of the advertisement.

The court was hearing a petition filed by B S Sehgal and several other investors of various non-banking firms, including those of the Sahara, JVG and Kuber Groups, alleging that the companies had swindled crores of rupees of investors money.

The court directed all the non-banking firms, including those of the three groups, to get their credit rating cleared by agencies approved by the RBI and the Securities Exchange Board of India.

UNI