ED Arrests Three In ₹80 Crore Taksheel Solutions IPO Scam Under PMLA

The Enforcement Directorate (ED) has made significant arrests in the ₹80 crore Taksheel Solutions IPO fraud case. On October 11, the ED arrested Nirmal Kotecha, Pavan Kuchana, and Kishore Tapadia under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. They were subsequently presented before the court of MSJ, Nampally, Hyderabad, on October 12, where the court granted them judicial custody until October 25.

Notably, Nirmal Kotecha and Pavan Kuchana currently reside in the Republic of Vanuatu and the US, respectively, as per the enforcement agency’s information.

ED has arrested Nirmal Kotecha, Pavan Kuchana and Kishore Tapadia under the provisions of the PMLA, 2002 on 11/10/2023 in the case of Initial Public Offer (IPO) scam of M/s Taksheel Solutions Limited, Hyderabad. Nirmal Kotecha and Pavan Kuchana are presently residents of Republic…

— ED (@dir_ed) October 13, 2023

Taksheel Solutions IPO scam

The Taksheel Solutions IPO scam involves a SEBI investigation that uncovered a deliberate strategy by the company’s promoters to inflate the company’s revenue for the purpose of issuing the IPO and subsequently diverting and siphoning off the IPO proceeds. SEBI found that the company had withheld crucial information and presented factually incorrect statements in its IPO prospectus, which misled the public.

According to the ED’s investigation, Pavan Kuchana, Nirmal Kotecha, and Kishore Tapadia devised a meticulously planned strategy to inflate M/s Taksheel Solutions Limited’s revenue for the IPO and then divert and siphon off the IPO proceeds. Nirmal Kotecha arranged Inter-Corporate Deposits (ICDs) of ₹34.50 Crore to M/s Taksheel Solutions Ltd to facilitate the IPO. These funds were routed through US-based entities owned by Pavan Kuchana, involving circular transactions with Taksheel Solutions Ltd.

Prior to the IPO’s launch, the ICDs were repaid from the IPO proceeds. Additionally, out of the IPO proceeds of ₹80.50 crore, ₹34.50 crore was diverted to US-based entities of Pavan Kuchana, ostensibly for services rendered. Furthermore, an additional ₹30.50 crore was transferred to entities in Singapore and Hong Kong under the control of Nirmal Kotecha.