[T.S.R:17531] Balmer Lawrie-Statutory Auditors Qualify FY11 Accounts after fraud discovered at BL JV-Transafe

Balmer Lawrie-Fraud Discovered At 50 per cent JV Transafe Services

Subsequent to the Company increasing its holdlng in TSL to 50% and exit of lCICI Venture, the accounting fraud was detected and criminal cases have been filed against TSL'S erstwhile  Managing Director, Chief Financial Officer and others. A plaint has also been filed before the Calcutta Hlgh Court agalnst lclcl Venture for approprlate remedies. 

 

lclcl Venture

Fund Management Co. Ltd. exited the joint venture unit, Transafe Services Ltd. (TSL) with full beneffts without retaining any right of recovery on the part of Balmer Lawrie & Co. Ltd, {BL) for possible losses. Specific joint venture agreement between BL and lclcl specifying the exit clause, important for any joint venture agreement could not be prcvided.  

Consequent to

exit of lclcl Ventures from TSL, the Entire financial burden fell upon and/or assumed by Balmer Lawrie & Co. Ltd. (BL) for arranglng necessary fund for settling the accounts of lclcl Ventures with premium as well as brlnging in new partner namely Balmer Lawrie Ven Leer Ltd. (BLVL), another unit in a joint venture arrangement with BL.  

lnvestment of

Rs.553.28 lakhs during the previous year, a fresh investrnent ot a sum of Rs. 1330.00 lakhs during the curent year by way of acquiring prefercnce shares in TSL and provldlng unsecured loan of  Rs 18 crore to BLVL for the pu.pose of purchase ot shanes held by lclcl venture, was done without going through a process of Due Diligence.  

ln addition, the interest falling due for payment as on 31/03/2011 has also been not serviced. Therefore, in our opinion, all these lnvestments totaling to Rs.3701.20 lakhs appear to be prejudicial to the interest of lhe company.
 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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