rediff.com: Mauritius court rejects LRs in Shanker Sharma case

A Mauritius court has rejected the Letters Rogatory sent by the Enforcement Directorate seeking information about the inward and outward flow of funds from the company owned by Shanker Sharma, director of the First Global, official sources said in New Delhi on Friday.

The court also rejected another LR through which the ED had sought information about the "unusual movement" of funds from his companies based in Mauritius to the United Kingdom and back.

The ED has informed the development to the Joint Parliamentary Committee probing the stock market crash of 2001, the sources said.

However, the ED informed the JPC that it was proceeding against Sharma and his company and other people in both cases on the basis of evidence available with it.

The ED filed a complaint against Sharma, his wife Devina Mehra and others for allegedly selling shares of Himachal Futuristic Communications Limited to Foreign Investment Institutes without the consent of the Reserve Bank of India.

Besides Sharma and his wife, the complaint also named First Global stock broking company, directors of Mohan Fiscal Private Limited and Naulakha Finance Private Limited for alleged violation of some provisions of Foreign Exchange Regulation Act.

Sharma is alleged to have sold nearly 850,000 shares of Himachal Futuristic Communication Limited to foreign institutional investors without the permission of Reserve Bank of India.

The shares were found to have been purchased at a price of Rs 1,050 and sold at Rs 1,060 to some FIIs while the actual price at the time of selling was ranging between Rs 2,100 to Rs 2,211.

The sources said that Sharma had earlier been served with a notice under Foreign Exchange Management Act, which was converted to FERA after the directorate was convinced that the offence had been committed under the latter act.

They said the agency suspected that Sharma had allegedly asked the FIIs to deposit rest of the money gained from the shares of Himachal Futuristic Communication Limited to his accounts in Mauritius.

ED has alleged that Sharma's First Global had sold nearly 592,000 shares of HFCL to 16 FIIs and their sub-account holders.

The First Global hit the headlines after the Tehelka expose on corruption in the defence deals as the company owns 14.5 per cent of shares in the website.

About the "unusual movement" of funds from Mauritius to London and back, RBI had asked the ED to probe the transfer of funds as it looked to be a complex transaction and the exact connection between the two needed a probe.

Meanwhile, the Enforcement Directorate alleged that Sharma and his wife were not co-operating with the probe and said "appropriate action" would be taken if their attitude did not change.



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