The Ministry of Corporate Affairs (MCA) has ordered an inspection of the books of Edelweiss Asset Reconstruction Co (EARC).

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This development came after whistleblower --Paras Kuhad -- wrote to the Prime Minister’s Office (PMO) and the Reserve Bank of India (RBI) alleging that Edelweiss Group, the controlling shareholder of the ARC along with its partner Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), diverted at least Rs 1,800 crore from EARC, according to Moneycontrol report.

Kuhad is a former additional solicitor general of India.

As per the report, Kuhad and his family own about 14 percent in EARC, which manages Rs 45,000 crore in assets.

However, Edelweiss ARC strongly denied all wrongdoings, the report said.

It must be noted that inspection of books is a process in which an investigating officer records statements of company officials and based on the findings, the ministry can recommend if the investigation be concluded.

Section 206 (5) of the Companies Act gives the central government the power to inspect the books of a company if “circumstances so warrant”.

According to the Moneycontrol report, in Kuhad’s letter to the PMO, he revealed that he had written at least thrice to the RBI between July and August 2020 but did not receive a reply. He also wrote that he pointed out the “omissions” to EARC’s board of directors, but did not receive any response.

First Published:Mar 18, 2021 9:22 AM IST