Supreme Court Orders CBI Probe into Sammaan Capital Promoters

India’s Supreme Court has ordered the Central Bureau of Investigation (CBI) to thoroughly investigate all six allegations raised by the Enforcement Directorate (ED) against the former promoters of Indiabulls Housing Finance, now known as Sammaan Capital, and its associated entities.

Unpacking the Allegations and Prior Scrutiny

These allegations specifically detail financial irregularities and the siphoning of funds across five distinct transactions. Notably, these same five transactions had previously been examined by the Delhi Police’s Economic Offences Wing (EOW), which had concluded that no irregularities were present.

• The ED’s complaint involves six allegations against the former promoters.
• Five allegations relate to irregularities and fund siphoning across five transactions.
• A sixth transaction, valued at Rs 1,574 crore, requires further investigation.

Beyond these, the apex court has directed a special court in Mumbai, which handles money-laundering cases, to decide within two weeks on the CBI’s application for a more extensive investigation into the aforementioned sixth transaction. Additionally, the Supreme Court has instructed both the CBI and the EOW to submit updated status reports concerning all these ongoing cases.

Counsel Highlights Fraud and Fund Diversion

Prashant Bhushan, counsel for the Citizens Whistle Blower Forum, informed a bench led by Chief Justice Surya Kant that the ED’s complaint, on its face, presented clear evidence of fraud, criminal conspiracy, and the diversion of funds. He also pointed to the practice of evergreening loans, which were reportedly funded by public money through various banks.

These loans, according to Bhushan, were allegedly manipulated by the company and its associated entities. This suggests a systemic issue concerning the handling of public funds within the financial system.