Yash Birla in Hot Water; May Be Forced To Vacate Birla House

Maharashtra home department has issued attachment notifications against six properties, one of which is Birla House.

The Maharashtra home department has issued attachment notifications against properties owned by beleaguered businessman Yash Birla and other officials and entities associated with the tainted Birla Power Solutions Ltd (BPSL).

The notification has been issued under provisions of the stringent Maharashtra Protection of Interest of Depositors in Financial Establishments Act (MPID).

The notification lists six properties, including Birla House with a total plot area of 5,412 square metres, three bungalows at Juhu with a total plot area of 4,525 square metres, a plot with two buildings at Mahim, with a total plot area of 2,789 square metres, all belonging to Lakshmi Properties of which Yash Birla is the director. It also lists demat and bank accounts of Yash Birla, associated entities and other individuals associated with BPSL .

BPSL had invited the public at large to invest in them through bills of exchange, fixed deposits and inter-corporate bonds promising attractive rates of interest, but failed to make repayments upon maturity in 2013.

First Information Reports (FIR) have already been lodged against Yash Birla and others associated with the company under provisions of the MPID Act and sections 420 (cheating) and 120 B (criminal conspiracy) of the Indian Penal Code (IPC). However, the Economic Offence Wing (EOW) of the Mumbai Police only filed charges against Birla last month. He has not been arrested during the course of the investigation and has moved a bail application which will be heard on 21 December.

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The bail application, which BloombergQuint has accessed, states that Birla stepped down as a non-executive director of BPSL in December 2012, and had nothing to do with the day-to-day affairs of the company. In his bail application, Birla also said that he did not solicit investments on behalf of the company. He added that he has been co-operating with investigators and that every effort is being made to repay investors.

The attachment notification was made as the state government is satisfied that the company and the chairman/directors of BPSL are unlikely to make repayments to the depositors.

(This article was first published on BloombergQuint)