Hyderabad: Ruling that they had played fraud in transfer of shares, the National Company Law Tribunal (NCLT) has ordered the city-based Hira Multi Construction Ventures Pvt Ltd (HMCL) to rectify the records suitably.
“We have no hesitation to hold that the respondents (HMCL) indulged in fraud and perpetuating fraudulent acts,” observed the bench, comprising A. Veera Brahma Rao (technical) and Dr N.V. Ramakrishna Badrinath (judicial) in a recent order pertaining to illegal transfer of shares.
The case relates to transfer of 1,000 shares held by one Dr Mohd Iftekaruddin to Abdul Rahman Hadi Ali, an NRI based in Saudi Arabia.
Earlier, the Enforcement Directorate (ED) had launched an investigation into the allegations of money laundering by Habib Abdul Razzaq Hadi Ali Baghdadi, who owns HMCL. A case was underway in NCLT against HMCL, which the petitioners alleged, got 118 acres of land registered in its name from another company, Greenspace Mega Resorts, without paying sale consideration.
In another fraud, HMCL, after entering into a development agreement with the Dream Valley group, which developed an international golf course and gated community project, unilaterally sent notices cancelling the agreement.
Dr Iftekaruddin approached the NCLT stating that he was allotted 1.51 per cent shares in HMCL in 2008 but found in the 2019 annual returns submitted to the Registrar of Companies that his shareholding was zero. He informed the NCLT that he neither expressed his intent to sell shares nor had he received any sale consideration.
DR Iftekaruddin alleged that the shares were transferred to Abdul Rahman Hadi Ali without following the procedure laid down in the Companies Act. Though he approached the company with a request to rectify the register of members as per provisions of 59 of Act, the latter did not act.
HMCL argued that it had uploaded financial statements every year in the public domain and complained that the transfer of shares that were over 10 years back was time-barred. It initially informed the Bench that it received a letter seeking transfer of shares but later said the request was made orally during telephonic conversations.
The NCLT, however, pointed out that transfer of shares should not be registered except on production of instrument of transfer duly stamped, which was missing in the present case. It also referred to the discrepancy of the company claiming to have transferred the shares in 2009 and showing a financial transaction that took place between the two parties in 2006. With regard to delay in approaching NCLT, the bench said time limit will apply from the date the fraud was noticed.
