Mohnish Pabrai tried to buy 2.7% stakes of KRBL which Enforcement Directorate (ED) cancelled the transaction because the deal was signed with Omar Ali Balsharaf who was being accused in the VVIP chopper scam and it was believed that he purchased the stakes using crime money ill-gotten from the VVIP chopper scam.
However, Balsharaf filled the case in Delhi High Court. The Court said that the ED orders to block the sale of KRBL shares were outside the law. Court also mentioned that Balsharaf had that stakes of KRBL in 2003. Even Balsharaf was alleged for committing a crime that took place around 2008, so it was believed that the stakes weren’t acquired using the “crime money”. Therefore, the High Court is saying that the ED officer who issued the letter to BSE blocking the deal was simply lying.
The charge sheet filed by ED alleged that Gautam Khaitan has been beneficiary of Rs 850 Cr of slush funds in various deals. Even ED alleged that the part of the money has been routed through a step-down subsidiary of KRBL based out of Dubai-RAKGT. KRBL management claims that the management was not aware of Gautam Khaitan’s other dealings and KRBL is no way associated with alleged corruption in VVIP Chopper scam. The judge of the High Court also noticed that RAKGT is no longer directly connected to KRBL in India. But there is no clarity whether KRBL still carries out legitimate business-distribution of Basmati rice in UAE through their nephew (Anurag Potdar).
ED acted against KRBL in another defense scam- the Embraer case and attached land property worth 15 Cr situated adjacent to the rice mill in Dhuri, Punjab.
Gross Fixed Assets of KRBL = Rs 1573 Cr
PAT (2019) = Rs 503 Cr
Income Tax paid in 2019 = Rs 230 Cr
Violation of the Foreign Exchange Regulation Act. Money was illegally routed by the international division of ITC through Singapore-based subsidiaries. Two former chairmen along with 15 executives of ITC were arrested.
KRBL board declared that the IT department had raised a tax demand of Rs 1270 Cr which was reduced to Rs 101 Cr due to the fast forward 12 months and the stand of the KRBL was vindicated on appeal.