Chanda Kochhar Money Trail: Ubiquitous Mhatre locked in Kochhar family enterprise  

As one goes deeper and deeper into the concentric circle of rot left behind by the Kochhars, the revelations are confounding. La Familia was never of this magnitude and its bedrock couldn't have been open and naked cronyism to this degree. Paper trails always have a missing link. The missing link leads you to the destination, in this case helps connecting the dots.

In Brothers Kochhars case, the missing link is Sharad Mhatre. In hot pursuit of the paper trail of family enterprise, IANS has now found that two investment companies, Elegant Investrade Pvt Ltd and Daisy Finvest, were used by the Kochhars to further their business interests. Elegant was incorporated on January 29, 1997 by Ms Savita Naik and Mr Sidharth Jadhav for ₹20.

Sometime in 1997, it was acquired by Anand Mohan Dalwani, a resident of 6 B Prem Kutir, 177, Backbay Reclamation, Marine Drive, Mumbai-20. The same year, Banque Indo Suez (later known as Calyon Bank), one of the key lenders to Credential Finance Ltd (CFL), filed company petition No 265 of 1997 before the Bombay High Court for winding up of CFL for their failure to repay the loan and the appointment of a liquidator.

To cut to the chase, during the pendency of this case, on December 31, 1997, Elegant entered into a deed of assignment with HDFC Bank through which it acquired the rights on the assets pledged by paying ₹2.75 crore. It remains a mystery as to how a company incorporated with just ₹20 managed to execute this deed by forking out ₹2.75 crore. No details are available with RoC (Registrar of Companies) on this turn of good fortune.

The provisional liquidator who was appointed by the court on March 7, 2003 and on March 18, 2008 as official liquidator also took over CFL's office at Maker Chambers V. Elegant steps in again at this point and files a company application No 837 of 2008 in company petition No 265 of 1997 seeking direction to the official liquidator to remove the seal of closure of the said office premises. CFL agreed to pay ₹40 lakh in three instalments to the Banque and paid another ₹15 lakh on March 2, 2009.

On July 24, 2009, the court ordered the official liquidator to release the same office, observing that Elegant was the bona fide purchaser. Elegant is another front of the Kochhars - the shares have changed hands and are now owned by Quality Advisors (Trust). Anand Dalwani with 9999 equity shares of ₹10 each and Sharad Mhatre with 1 share were replaced by Quality Advisors on October 4, 2016 in the first tranche taking over Dalwani's 9999 shares and on March 31, 2017, the balance 1 share was taken from Mhatre.

Over time, the paid up capital of this company has remained at ₹1 lakh, but between FY 2003 to FY 2011, the company has shown share application money of ₹2.60 crore and loans as nil. When new rules kicked in 2011, from FY 2012 onwards Elegant started showing unsecured loans amounting to ₹8.91 crore in FY12 and ₹5.65 crore in 2017.

As it happens this Sharad Mhatre is on the board of directors of Kochhar companies - Supreme Energy, NuPower Wind Farms, Credential Securities, Credential Capital Services, Daisy Finvest et al. In Daisy Finvest, Sharad Mhatre has been on the board since August 21, 2006. Daisy was typically created on December 20, 1996 by Santosh Jabare and Chandra Prakash Soni with a paid up capital of ₹20.

In 2004, a Jaipal S Bhatia purchased the company and the authorised capital and paid up capital was ramped up to ₹1 lakh. In 2006, Daisy found new buyers in Pacific Capital Services Pvt Ltd, 91 per cent owned by Neelam Mahesh Advani, wife of Mahesh Advani, brother of Chanda Kochhar.

Between FY March 2004 till March 2010, the company has shown ₹4.99 crore funds - ₹1 lakh paid up equity, ₹4.25 crore share application money and ₹73.43 lakh unsecured loans. From 2011 onwards the mystery sets in as the share application money evaporates and instead unsecured loans crop up. This ranged between ₹6.36 crore and ₹10.62 crore.

Then comes the clincher, in a board meeting on August 31, 2017, a proposal to amalgamate the company with Credential Securities was approved. The road ends with the Kochhars.

Credential Securities was incorporated on April 15, 1994 by Deepak and Rajiv Kochhar at an investment of ₹200. In January 2015 the authorised capital was raised from ₹25 lakh to about ₹1.01 crore. On January 12, 2015, the company issued 10 lakh equity shares of ₹10 each to Dubai-based NRI Jaiprakash Karna.

Subsequently, these shares were transferred to his wife Varuna Karna, Chanda Kochhar's sister. As on March 31, 2017, the accumulated losses of the company were ₹57.99 lakh, up from ₹57.37 lakh on March 31, 2015 when Karna made the investment. Incidentally, Jaiprakash Karna also set up two companies, Emsol Innovation and Emjay Enterprises, both based in Chennai.

It doesn't end there, this wheel comes full circle with an examination of the Kochhar family's business interests, where the final pitstop uncovers a man called Sharad Shankar Mhatre and his strong linkages with the family and multiple directorships in their companies. One such company is Opel Properties where Mhatre has been a director since June 21, 2006.

Neither Rajiv or Deepak Kochhar are directors in Opel though. Started in July 2003 by Jaipal Ajit Singh Bhatia and Amit Chimanlal Shah with ₹1 lakh as paid up capital and ₹2 lakh as authorised capital, the company changed ownership in 2006 with ubiquitous Pacific Capital Services taking over.

It is here that the company ownership takes a curious turn since PCSPL is 91 per cent owned by Neelam Mahesh Advani, Chanda Kochhar's sister in law. During 2005 and 2006, Opel's capital jumped to ₹6.31 crore on March 31, 2006 from just a meagre ₹1 lakh on March 31, 2005. This remained steadfast for the next seven years.

In FY 2014-15, Opel obtained unsecured loans of ₹11.29 crore. To trace the origins of the Mhatre-Kochhar connection, one needs to go back to Elegant Investrade Pvt Ltd where Sharad Mhatre is a director. In his application to the company, he has described his profession as service.

Elegant Investrade is believed to be a front for the Kochhars. The ownership has changed hands and gone to a trust called Quality Advisors Trust. It is alleged that the assets of NuPower, Kochhar's renewable empire, are held by Pinnacle Energy, a trust whose beneficiaries are Kochhars. This is the modus operandi used by them for wealth succession and retaining a veil of secrecy over their assets.

On doing a deeper dive, it is revealed that Mhatre, Director Identification No 00921939,resident of G 1 L Narayan Niwas P.SHB.Palkar Marg, Parel, Mumbai 12, is also a director in NuPower Wind Farms Ltd, Credential Securities Pvt Ltd, Credential Capital Services Pvt Ltd, Daisy Finvest, Pacific Capital Services Pvt Ltd, all seemingly with a Kochhar connect; he is also a director in Nemani Capitals Pvt Ltd, Opel Properties Pvt Ltd with a Chanda Kochhar family connect, Mandeep Software Services Pvt Ltd and Supreme Energy Pvt Ltd.

In Nemani Capitals, Mhatre is a director since August 29, 2008 while in Mandeep Software Services, he has been a director since August 26, 2008 along with Neelam Mahesh Advani, Chanda Kochhar's brother Mahesh's wife. Mhatre is also a director in Ruplila Steels; Citius Power and Citius Energy, which have both been struck off in the post DeMo drive against errant shell companies.