There could be trouble in the winds for Suzlon. The government fears it might have diverted public money for purposes other than what was stated in its IPO Prospectus.
Asia’s largest wind turbine company is in the eye of a storm. Company Affairs Minister Prem Chand Gupta told CNBC-TV18 the Mumbai registrar of companies had pointed out some discrepencies in Suzlon’s balance sheet for fiscal 2006. The registrar is also apparently apprehensive that Suzlon might have diverted 2,000 crore rupees to various parties.
PC Gupta, Company Affairs Minister, said, “We have been getting a lot of complaints from various small investors that IPO funds were being diverted by companies of which there was no trace. So we were concerned about it.”
Suzlon’s inspection is part of a larger exercise the government has undertaken to scrutinise IPOs since 2004. Suzlon floated an IPO in 2005. The registrar of companies says certain advances have not been repaid to the company. Suzlon, for its part, has confirmed it is co-operating with the government.
Tulsi Tanti, CMD, Suzlon Energy, said, “Things are very clear. They have asked for some details & information, which we have to submit. I think it is part of the process. There is no concern or reaction from our side. It’s the normal process for any enquiry, and the detailed information that we have to submit, we already have. ”
Government sources say initial scrutiny has shown discrepencies in many other IPOs as well. While they are tightlipped about which other IPOs are under the scanner, sources say the crackdown could open a can of worms.
10 July 2007
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