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18TH PROGRESS REPORT ON THE ACTION TAKEN PURSUANT TO THE RECOMMENDATIONS OF THE JOINT PARLIAMENTARY COMMITTEE ON STOCK MARKET SCAM AND MATTERS RELATING THERETO
August, 24th 2012
                 Government of India
                 Ministry of Finance




   18TH PROGRESS REPORT ON THE ACTION TAKEN
     PURSUANT TO THE RECOMMENDATIONS OF
     THE JOINT PARLIAMENTARY COMMITTEE ON
STOCK MARKET SCAM AND MATTERS RELATING THERETO




                   June, 2012
18TH PROGRESS REPORT ON THE ACTION TAKEN
  PURSUANT TO THE RECOMMENDATIONS OF
  THE JOINT PARLIAMENTARY COMMITTEE ON
        STOCK MARKET SCAM AND
       MATTERS RELATING THERETO




                June, 2012



                                           .
                                               INTRODUCTION
        The Report of the Joint Parliamentary Committee on Stock Market Scam and matters relating thereto was
presented to the Parliament on 19th December 2002. In Para 3.31, the JPC recommended that the Government
should present its Action Taken Report to the Parliament within six months and, thereafter, a Progress Report every six
months until action on all the recommendations has been fully implemented to the satisfaction of Parliament. The
Government submitted the Action Taken Report to the Parliament on 9.5.2003. Ist Progress Report was presented in
the Lok Sabha/Rajya Sabha on 12.12.2003 and 16.12.2003 respectively, 2nd Progress Report on 10.6.2004, 3rd on
09.12.2004, 4th on 29.7.2005, 5th on 20.12.2005, 6th on 23.05.06 and 7th on 19.12.2006 and 8th Progress Report
was placed in the Parliament Library on 22.5.2007 and was presented to Lok Sabha/Rajya Sabha on 17.08.2007, 9th
Progress Report was presented on 07.12.2007 & 10th Progress Report was placed in Parliament Library on during
May, 2008, and was presented to Lok Sabha/Rajya Sabha on 24.10.2008, 11th Progress Report was presented on
16.12.2008, 12th Progress Report was presented on 09.06.2009, 13th Progress Report was presented on 18.12.2009,
14th Progress report was presented LS/RS on 7.5.2010 and 15 Progress report was presented LS/RS on 9.12.2010.
16th Progress Report was placed in the Parlaiment Library on 8.6.2011/21.6.2011 and was presented to Lok Sabha/
Rajya Sabha on 5.8.2011. 17th Progress Report was presented to LS/RS on 7.12.2011.
2.      JPC had made 276 recommendations/observations/conclusions. In the ATR presented to the Parliament during
May 2003, final response of the Government in respect of 111 recommendations had been given. In the Progress
Report presented during December, 2003, action was completed on 39 recommendations. In the Second Progress
Report action was completed on 36 recommendations, in the Third Progress Report on 18 recommendations, in the
Fourth Progress Report on 23 recommendations, in the Fifth Progress Report on 06 recommendations, in the Sixth
Progress Report on 03 recommendations, in the Seventh Progress Report on 07 recommendations and in 8th Progress
Report, only further progress to the pending recommendations was given. In the 9th Progress Report, action was
completed on 07 recommendations, in 10th Progress Report, action was completed on 02 recommendations, in 11th
Progress Report action was completed on 10 recommendations, 12th Progress Report, action was completed on 03
recommendations, in 13th Progress Report, action was completed on 05 recommendations, 14th Progress Report
action was completed on 01 recommendation. In 15th Progress Report action was completed on 01 recommendation.
In 16th & 17th Progress Reports, there was no change in status and action was pending on 4 recommendations and in
this Progress Report also, action on 4 recommendations remains the same.
                                                                    INDEX






Sl. No.   Para. No.                                             Subject in brief      Page Nos.

  1.       5.111      Laxity on the part of apex regulators ­the RBI and Registrar,
                      Cooperative Societies, Government of Uttar Pradesh.                 1-7


  2.       5.113      Recovery of siphoned money in the case of
                      CCBL (Government of Uttar Pradesh).                                7-10



  3.       5.159      Action against Bank auditors for
                      dereliction of duty by ICAI.                                      11-22



  4.       7.51       Expeditious action on involvement of promoters/corporate
                      houses in manipulation of prices of scrips.                       22-33
                             18th PROGRESS REPORT (June-2012) OF THE ACTION TAKEN PURSUANT
                     TO THE RECOMMENDATIONS OF JOINT PARLIAMENTARY COMMITTEE ON STOCK MARKET
                                       SCAM AND MATTERS RELATING THERETO - 2002.
Sl. No. Para No. Observation/Recommendation of JPC                            Reply of Government/Action Taken                                Further Progress
1.       5.111   Neither the State Registrar under whose         As reported in May, 2003                                              No change in status.
                 direct control the Bank functions nor the RBI   As against para 5.109
                 which is an apex regulator in the case of       As reported in December, 2003
                 urban cooperative Banks came to know of         As against para 5.109
                 the misuse of powers and flagrant violation     As reported in June, 2004
                 of regulations/directives of the RBI until a    Reply from Govt. of Uttar Pradesh is awaited. The last reminder
                 public outcry and news in the press. Though     was sent on 1/6/2004.
                 under the UP Cooperative Societies Act,         As reported in December, 2004
                                                                 As against para 5.109.
                 1965 wide powers of conducting
                                                                 As reported in July, 2005
                 inspections, enquiry and audit are vested
                                                                 As against para 5.109.
                 with the Registrar of the Cooperative
                                                                 As reported in December, 2005
                 Societies, these powers were not exercised      As against Para 5.109.
                 to check the functioning of the Bank. RBI       As reported in May, 2006
                 too surprisingly issued licences as late as     As against para 5.109
                 February, 2001 for opening four more            As reported in December, 2006
                 branches of the Bank, thereby giving an         As against Para 5.109.
                 impression that the Bank was functioning        As reported in May, 2007
                 well. In fact even when in the annual           As against Para 5.109.
                 inspection report of 1999, the RBI had          As reported in December, 2007
                 clearly indicated some glaring irregularities   As against Para 5.109.
                 and the auditors of the State Cooperative       As reported in May, 2008
                 Department for the period 1997-2000 had         As against Para 5.109.
                 pointed out serious irregularities, immediate   As reported in December, 2008
                 steps were not taken for rectifying the         Government of Uttar Pradesh have informed that:
                 irregularities. This leaves the Committee       (a) Vide orders dated 24.02.2003 a high level enquiry was ordered
                 with the impression that both the RCS as        to be conducted by the then Member, Board of Revenue, UP viz.
                 well as RBI showed laxity in discharging        Shri V.K. Mittal to look into the lapses committed by its officers.
                 their duties even prior to March, 2001 when     (b) On the basis of the report of Shri V.K. Mittal, the matter was
                                                                 further inquired into by the Economic Offences Wing of the
                 the run on the Bank surfaced.
                                                                 Criminal Investigation Department, Govt. of UP. In its report dated
                                                                 29.3.07, the Inspector General of Police of the Economic Offences
                                                                 Wing has found 6 officers of the Cooperative Department and 11
                                                                 officers of the Audit Department guilty of lack of supervision.
                                                                 Departmental action is being taken against these officers.
                                                                            2

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                         Further Progress
                                                     As reported in June, 2009
                                                     Government of UP have informed that after examining the report
                                                     of the E.O.W., following action has been taken:
                                                     (i) Against the officers of the Co-operative department:
                                                     1. Shri R.K.Srivastava, Joint Registrar- Disciplinary proceeding
                                                     has been initiated.
                                                     2. Shri P.K.Singh, Joint Registrar- Disciplinary proceedings has
                                                     been initiated.
                                                     3. Shri D.C.Singh, Assistant Registrar- He has been placed under
                                                     suspension and disciplinary proceeding initiated.
                                                     4. Shri A.K.Pandey, Assistant Registrar- He has been placed
                                                     under suspension and disciplinary proceeding initiated.
                                                     5. Shri Deo Nath, Assistant Registrar- He retired in the year 2001
                                                     hence no departmental action can be initiated against him.
                                                     6. Shri S.P.Singh, Joint Registrar- After complete examination
                                                     of the case he was not found guilty, hence it has been decided
                                                     not to take any action against him.
                                                     (ii) against the officers of the finance department:
                                                     1. Shri V.K.Tandon, Senior Auditor- His services were terminated
                                                     on 24.3.2006 but he has got stay order from the Hon'ble High
                                                     Court in writ petition no. 4316/06 on 23.05.06 and reinstated
                                                     subject to the final decision in the writ petition mentioned above.
                                                     2. Shri H.N.Awasthi, Senior Auditor- Two increments have been
                                                     stopped which will be effective throughout the service.
                                                     3 to 6-Shri Brij Raj Singh, Distt.Audit Officer (Retd) Shri Lallan
                                                     Singh, Distt.Audit Officer.Sri Padam Jang ­ RegionalAudit Officer
                                                     Shri Kamla Kant Goswami,Regional Audit Officer.
                                                     Charge sheet was issued to all these officers on 20.1.2005. Final
                                                     Dicision is to be taken.
                                                     7. Shri Awadhesh Chandra Dubey, Chief Audit Officer (Retd).
                                                     He was given charge sheet on 05.01.2005 but he was not found
                                                     guilty by the enquiry officer, hence disciplinary proceedings
                                                     against him has been dropped.
                                                     As reported in December, 2009
                                                     Govt. of UP have reported the updated position w.r.t.
                                                     departmental action taken against its officers of Cooperative and
                                                                            3

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                         Further Progress
                                                     Audit Department(s) as per details given below:
                                                     I. Against the officers of the Co-operative department:
                                                     (i) Sri R.K.Srivastava, Ex. Dy. Registrar, presently posted as
                                                           Joint Registrar- Disciplinary proceeding has been initiated.
                                                           Final decision is being taken.
                                                     (ii) Sri P.K.Singh, Ex. Dy. Registrar, presently posted as Joint
                                                           Registrar- Disciplinary proceedings has been initiated. Final
                                                           decision is being taken.
                                                     (iii) Sri S.P.Singh, Ex. Dy. Registrar, presently posted as Joint
                                                           Registrar- After complete examination of the case he was
                                                           not found guilty, hence it has been decided not to take any
                                                           action against him. The executive action in this regard may
                                                           be treated as complete.
                                                     (iv) Sri Deo Chand Singh, Assistant Registrar- He has been
                                                           placed under suspension and disciplinary proceedings
                                                           initiated on 27.10.08. Final decision is being taken.
                                                     (v) Sri Deo Nath, Assistant Registrar- He retired in the year 2001
                                                           hence no departmental action can be initiated against him.
                                                           The executive action in this regard may be treated as
                                                           complete
                                                     (vi) Sri A.K.Pandey, Assistant Registrar- He has been placed
                                                           under suspension and disciplinary proceeding initiated on
                                                           28.10.08. Final decision is being taken.
                                                           Keeping in view specific recommendations of Govt. of UP in
                                                     respect of officers mentioned at sl. No. I(iii & v) above, it is
                                                     proposed that action against these officers may be treated as
                                                     complete.
                                                     II. Against the officers of the finance department:
                                                     (i) Sri Awadhesh Chandra Dubey, Chief Audit Officer (Retd). :
                                                           He retired on 31.7.07. The matter relates to the period 1996-
                                                           2000 hence decision has been taken not to institute
                                                           disciplinary proceedings under CSR 351. The executive
                                                           action in this regard may be treated as complete.
                                                     (ii) Shri Moti Lal, Regional Audit Officer (retired on 31.12.05).
                                                     (iii) Shri Ram Kumar Singh Chauhan, District Audit Officer (retired
                                                           on 30.6.2000)
                                                     (iv) Shri Shiv Dayal Singh, District Audit Officer (retired on
                                                           31.12.99)
                                                                             4




Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                             Further Progress
                                                           In respect of officers mentioned at sl. No. ii to iv, it has been
                                                           stated that the matter relates to period of 1996-2000 hence
                                                           decision has been taken not to institute disciplinary
                                                           proceedings under CSR 351A. The executive action in this
                                                           regard may be treated as complete.
                                                     (v) Mr. Harish Kumar Srivastava, Joint-Chief Audit Officer: His
                                                           explanation was sought vide letter dated 16.1.09 and reply
                                                           was received on 11.2.09. Decision is pending.
                                                     (vi) Mr. Subrat Chaudhary, Deputy Chief Audit Officer: Explnation
                                                           was called vide letter dated 24.10.08 and reply to the same
                                                           was received on 26.11.08. Decision is pending.
                                                     (vii) Sri Brij Raj Singh, Distt. Audit Officer (retired on 30.4.2000)
                                                     (viii) Sri Lallan Singh, Distt. Audit Officer (retired on 31.3.2004).
                                                     (ix) Sri Padam Jang ­ Regional Audit Officer
                                                     (x) Sri Kamla Kant Goswami, Regional Audit Officer.
                                                           Charge sheet was issued to all these officers mentioned at
                                                           sl. No. vii to x above on 20.1.2005. Final Decision is pending
                                                           against these officers.
                                                     (xi) V.K.Tandon, Senior Auditor- His services were terminated
                                                           on 24.3.2006 but he has got stay order from the Hon'ble
                                                           High Court in writ petition No. 4316/06 on 23.05.06 and was
                                                           reinstated subject to the final decision in the writ petition
                                                           mentioned above. He retired on 31.07.07. The executive
                                                           action in this regard may be treated as complete.
                                                     (xii) Sri H.N.Awasthi, Senior Auditor- Two increments have been
                                                           stopped permanently & censure entry awarded. The
                                                           executive action in this regard may be treated as complete.
                                                           Keeping in view specific recommendations of Govt. of UP in
                                                     respect of officers mentioned at sl. No. II(i to iv, xi & xii) above,
                                                     it is proposed that action against these officers may be treated
                                                     as complete.
                                                     As reported in May, 2010
                                                                Govt. of UP have reported the updated position w.r.t.
                                                     departmental action taken against its officers of Cooperative and
                                                     Finance Department(s) as per details given below:
                                                      I. Against the officers of the Co-operative department:
                                                     (i) Sri R.K.Srivastava, Ex. Dy. Registrar, presently posted as
                                                     Joint Registrar- Disciplinary proceeding closed after awarding
                                                                             5

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                            Further Progress
                                                     penalty of censure to him. Govt of UP have recommended that
                                                     executive action may be treated as complete.
                                                     (ii) No change has been reported in respect of following officers:
                                                               Sri P.K.Singh, Ex. Dy. Registrar, presently posted as Joint
                                                                Registrar;
                                                               Sri Deo Chand Singh, Assistant Registrar;
                                                               Sri A.K.Pandey, Assistant Registrar.
                                                      II. Against the officers of the Finance Department:
                                                     (i) Mr. Harish Kumar Srivastava, Joint-Chief Audit Officer: His
                                                     explanation was sought vide letter dated 16.1.09 and reply was
                                                     received on 11.2.09. Strict warning awarded. The executive
                                                     action may be treated as complete.
                                                     (ii) Mr. Subrat Chaudhary, Deputy Chief Audit Officer:
                                                     Explanation was called vide letter dated 24.10.08 and reply to
                                                     the same was received on 26.11.08. He was not found guilty.
                                                     The executive action may be treated as complete.
                                                     (iii) Sri Padam Jang ­ Regional Audit Officer : Punishment of
                                                     censure was awarded. The executive action may be treated as
                                                     complete.
                                                     (iv)      Sri Kamla Kant Goswami, Regional Audit Officer:
                                                     Punishment of censure was awarded. The executive action may
                                                     be treated as complete.
                                                     (v) Sri Brij Raj Singh, Distt., Audit Officer since (retired on
                                                     30.4.2000) : He was not found guilty and executive action may
                                                     be treated as complete.
                                                     (vi) Sri Lallan Singh, Distt., Audit Officer : Opinion of UP Public
                                                     Service Commission, Allahabad on punishment sought vide letter
                                                     dated 8.1.2010.
                                                      In view of the recommendations of the Govt. of UP, it is proposed
                                                     that action against officers mentioned at serial No.(I)(i) and
                                                     (II)(i to v) above may be treated as complete.
                                                      Now, the disciplinary action in respect of (a) 3 officers of Coop.
                                                     Deptt., out of total 6, mentioned at sl. No. (I)(ii) and (b) only one
                                                     officer of Finance Deptt. mentioned at sl. No.(II) (vi), out of total
                                                     12 remains pending.
                                                     As reported in December,2010
                                                     Govt. of UP have reported the updated position with reference
                                                     to departmental action taken against officers of Cooperative and
                                                                            6

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                         Further Progress
                                                     Finance Department (s) as per details given below :
                                                     I. Against the officers of the Co-operative Department:
                                                     (i) Sri P.K. Singh, Ex-Dy. Registrar presently posted as Joint
                                                           Registrar. The consent of U.P.P.S.C. has been obtained &
                                                           the matter is under consideration at higher level.
                                                     (ii) Sri Deo Chand Singh, Assistant Registrar Cooperative
                                                           Societies. Action under Rule 351-A of C.S.R. is being taken
                                                           against him.
                                                     (iii) Sri A.K. Pandey, Assistant Registrar Cooperative Societies.
                                                           The opinion of U.P.P.S.C. is being taken regarding
                                                           punishment.
                                                      II. Against the officers of the Finance Department:
                                                     Mr. Lallan Singh, Distt. Audit Officer Cooperative Societies U.P.
                                                     Lucknow. The decision of 10% curtailment from his pension has
                                                     been taken and disciplinary inquiry has been closed.
                                                     From the above, it is clear that with the completion of action
                                                     against Shri Lallan Singh, the action is complete in respect of all
                                                     the officers of Finance Department.
                                                     As reported in June, 2011
                                                     The Government of Uttar Pradesh have informed the updated
                                                     position w.r.t. departmental action taken against its officers of
                                                     Cooperative Department as per details given below:
                                                     Against the officers of the Cooperative Department:
                                                     (i)Shri P.K.Singh , Ex-Dy. Registrar, presently posted as Joint
                                                     Registrar: The opinion of U.P.P.S.C. is being taken regarding
                                                     punishment.
                                                     (ii) Shri Deo Chand Singh, Assistant Registrar Coop. Societies:
                                                     Action under Rule 351-A of C.S.R. is being taken against him
                                                     and the matter is under consideration at highest level.
                                                     As reported in December, 2011
                                                     The Government of Uttar Pradesh has furnished the updated
                                                     position w.r.t. departmental action taken against its officers is
                                                     as under:-
                                                     (i) Sri P.K.Singh , Ex-Dy. Registrar, presently posted as Joint
                                                     Registrar. Disciplinary proceeding closed after awarding censure
                                                     entry to him. Govt. of UP has recommended that the executive
                                                     action may be treated as complete.
                                                                                         7

Sl. No. Para No. Observation/Recommendation of JPC                             Reply of Government/Action Taken                                  Further Progress
                                                                  (ii) Sri Deo Chand Singh, Assistant Registrar, Coop. Societies.
                                                                  Govt. of U.P. has submitted that action under Rule 351-A of
                                                                  C.S.R. is being taken against him, which is not found appropriate
                                                                  and recommended that the executive action may be treated as
                                                                  complete.
                                                                  (iii) Sri A.K.Pandey, Assistant Registrar, Coop. Societies, the
                                                                  opinion of U.P.P.S.C is being taken regarding punishment.
                                                                  In view of the recommendation of Govt. of UP, we may treat the
                                                                  action as complete in respect of (i & ii).


2.      5.113   In view of the foregoing observations, the        As reported in May, 2003                                                No change in status.
                Committee recommend the following                 As against para 5.109
                specific action:-                                 As reported in December, 2003
                (i) In order to expedite action on the            As against para 5.109
                     criminal complaints which are                As reported in June, 2004
                     presently pending adjudication in the        Reply from Govt. of Uttar Pradesh is awaited. The last reminder
                     Court of the Metropolitan Magistrate,        was sent on 1/6/2004.
                     Lucknow, it is recommended that such         As reported in December, 2004
                     case be tried by a Special Court.            As against para 5.109
                (ii) UP Government may be asked to                As reported in July, 2005
                     initiate further enquiry against the         Regarding constitution of Special Courts, Govt. of UP have
                     concerned State Registrars for not           informed that CBI has filed a charge sheet in the Special Court
                     being vigilant and excercising               designated for dealing CBI cases, there is no need of constituting
                     supervision on the working of the Bank       Special Courts.
                     even when the UP Cooperative                 A departmental enquiry was also conducted under section 65 of
                     Societies Act, 1965 empowers the             UP Co-operative Society Act 1965 for the irregularities in bank.
                     Registrar to hold an enquiry into the        And after the enquiry, a surcharge order for the value of Rs.
                     working of the co-operative society,         30,14,45,235.00 was passed against Shri Anand Krishan Johri
                     carry out inspection on his own and          vide Distt. Assistant Registrar, Lucknow's order No. 2873/co-
                                                                  op. dated 29.1.05 under section 68(2) of the Act. Out of the total
                     even supersede the Committee of
                                                                  283 debtor members of the bank, a sum of Rs. 3.86 crore has
                     Management in case it is found that any
                                                                  been recovered, from 45 members.
                     act is committed which is prejudicial to
                                                                  Information relating to enquiry against the concerned State
                     the interest of the society or its members
                                                                  Registrar has been given in reply to para No.5.109.
                     or otherwise if the society is not
                                                                  As reported in December, 2005
                     functioning properly. This should be
                                                                  In the case of recovery from 283 debtors of the City Cooperative Bank
                     done expeditiously.
                                                                  Ltd., a sum of Rs.3.94 crore has been recovered from 45 defaulters.
                                                                                           8

Sl. No. Para No. Observation/Recommendation of JPC                               Reply of Government/Action Taken                         Further Progress
               (iii) CBI must complete the investigations           Regarding action against the officers of Cooperative Department,
                     expeditiously in the case wherein              the Govt. of Uttar Pradesh have reported that the enquiry being
                     FIR has been filed for siphoning off           conducted by Economic Offences Wing (EOW) of Crime
                     funds in the form of cheque                    Investigation Department (CID) of UP Police is in progress.
                     purchase for Rs. 1.71 crore.                   Govt. of UP have been requested to take up the matter with
               (iv) RBI must introduce a system whereby             EOW of CID of UP Police for expediting completion of the same.
                     the irregularities pointed out in the          As reported in May, 2006
                     annual inspection Reports are                  As against para 5.109
                     removed by the Banks and compliance            As reported in December, 2006
                     report is submitted within a period of         Shri Anand Krishan Johri, (one of the promoters and accused in
                     six months from the date of inspection.        the charge sheet filed by the CBI) against whom an order under
               (v) Strict penal provisions be                       Section 68(2) of UP Co-operative Societies Act, 1965 has been
                     incorporated in the Banking                    passed for a surcharge of an amount of Rs. 30.14 crore has
                     Regulation Act, 1949 for non-                  filed an appeal (No.94/05) against the same before Hon'ble
                     compliance of the directives/                  Cooperative Tribunal UP. Out of 490 defaulters total recoveries
                     guidelines issued by the RBI from time         worth Rs. 3.95 crore have been made from 112 defaulters of
                     to time and in case of default, strict
                                                                    the banks dues.
                     disciplinary action should be initiated
                                                                    As reported in May, 2007
                     against the erring officials.
                                                                    As against Para 5.109.
               (vi) As an apex body, though it is not possible
                                                                    As reported in December, 2007
                     for RBI to monitor each and every
                                                                    As against Para 5.109.
                     transaction, it is essential that concurrent
                                                                    As reported in May, 2008
                     audit is conducted in the Banks on a
                                                                    As against para 5.109.
                     regular basis. The Reserve Bank of India
                                                                    As reported in December, 2008
                     may consider making this mandatory.
               (vii) Investigation must be conducted to             (i) Govt. of UP have stated that their Law Department has
                     unearth where the siphoned money                     advised that no separate Court is required to be established
                     (Rs. 32.30 Crore) has been deployed.                 as the cases are already being heard in the Special Court
                     Expeditious action is needed to                      of CBI. Therefore, action on this part may be treated as
                     recover the money.                                   complete.
                                                                    (ii) Govt. of UP have stated that action is being taken against
                                                                          the officers of Cooperative Department who have been held
                                                                          responsible for lack of supervision in the report of Economic
                                                                          Offences Wing of Govt. of UP.
                                                                    (iii to vi) Extensive action on these parts has already been
                                                                          reported in the Action Taken Report presented in May 2003
                                                                          against para No.5.109. In view of this, action on these parts
                                                                          may be treated as complete.
                                                                           9

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                             Further Progress
                                                     (vii) Regarding recovery from various defaulters including Shri
                                                           Anand Kishore Johri, the Govt. of UP have been advised to
                                                           expedite the proceedings.
                                                     As reported in June, 2009
                                                     Govt. of UP have informed as under :                                  .
                                                     (ii) As against para No.5.111.
                                                     (vii) Out of 490 defaulters, recoveries worth Rs. 12.75 crore has
                                                     been made from 112 defaulters of the bank dues.
                                                     As reported in December, 2009
                                                     Govt. of UP have informed as under :
                                                     (ii) As against para No.5.111.
                                                      (vii) Out of an amount of Rs.27.14 crore to be recovered from
                                                     490 defaulters, an amount of Rs.15.99 crore has been recovered
                                                     from 262 defaulters.
                                                     As reported in May, 2010
                                                     Govt. of UP have informed as under:
                                                     (ii) As against para No.5.111.
                                                     (vii) Out of the amount of Rs.27.14 crore to be recovered from
                                                     490 defaulters, an amount of Rs.18.88 crore has been recovered
                                                     from 390 defaulters.
                                                     Regarding recovery from the accused (Anand Krishna Johri),
                                                     appeal filed by him is pending in the Hon'ble Cooperative Tribunal.
                                                     As reported in December, 2010
                                                     Govt. of U.P. have informed as under:
                                                     (ii) As against para No. 5.111.
                                                     (vii) Out of the amount of Rs.27.14 crore to be recovered from
                                                     490 defaulters, an amount of Rs. 19.13 crore has been recovered
                                                     from 406 defaulters.
                                                     Out of the balance amount Rs. 7.84 crore which is to be
                                                     recovered from 84 defaulters, the recovery proceedings in
                                                     respect of Rs. 3.89 crore from 33 defaulters is pending in the
                                                     competent courts. Regarding the remaining amount of Rs. 3.95
                                                     crore from 51 defaulters, the recovery proceedings are under way.
                                                     As regards, the recovery from Shri Anand Krishna Johri, one of
                                                     the accused in the charge sheet filed by CBI, appeal filed by
                                                     him is pending in the Hon'ble Cooperative Tribunal.
                                                                          10

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                      Further Progress
                                                     As reported in June, 2011
                                                     Govt. of U.P. have informed as under:
                                                     (ii) As against para 5.111.
                                                     (vii) an amount of Rs.27.14 crore is to be recovered from 490
                                                     defaulters out of which an amount of Rs.19.60 crore has been
                                                     recovered from 412 defaulters. Out of the balance amount of
                                                     Rs.7.54 crore to be recovered from 78 defaulters, the recovery
                                                     proceedings in respect of Rs.3.71 crore from 32 defaulters is
                                                     pending in the competent courts, therefore, action on this may
                                                     be treated as complete. As regards the balance of Rs.3.83
                                                     crore from 46 defaulters, the recovery proceedings are
                                                     underway.
                                                     The recovery of money from the accused (Shri Anand Krishna
                                                     Johri) as per section 68 (2) of U.P. Cooperative Societies Act,
                                                     1965, order has been passed against Shri Johri (one of the
                                                     promoters and accused in the charge sheet filed by the C.B.I.)
                                                     for surcharge of an amount of Rs.30.14 crore. Shri Johri has
                                                     filed appeal No. 94/05 against this order before Hon'ble
                                                     Cooperative Tribunal, U.P. The Hon'ble Tribunal has cancelled
                                                     the surcharge order and remanded the case for fresh hearing.
                                                     The Assistant Registrar Cooperative Societies, Lucknow after
                                                     hearing the case as per directions of the Hon'ble Tribunal has
                                                     passed the surcharge order of the same amount again i.e.
                                                     Rs.30.14 crore on 28.10.2009. (Sri Johri has again filed appeal
                                                     No. 225/09 in the Hon'ble Cooperative Tribunal, U.P. The last
                                                     date of hearing was on 28.3.2011. As the recovery of surcharge
                                                     amount of Rs.30.14 crore from Shri Johri is pending in the
                                                     competent court, therefore, action on this may be treated as
                                                     complete.
                                                     As reported in December, 2011
                                                     As against para 5.113(ii)
                                                     This para relates to taking action against concerned State
                                                     Registrars and is also linked to para 5.111. Action on para
                                                     5.113 (ii) will remain pending as long as action on 5.111 is
                                                     completed.
                                                                                       11

Sl. No. Para No. Observation/Recommendation of JPC                           Reply of Government/Action Taken                                   Further Progress
3.      5.159   In view of the foregoing the Committee          As reported in May, 2003                                                Proceedings in connection with audit
                recommend the following:-                       (i) Global Trust Bank (GTB) has reported that they are initiating       of Global Trust Bank Ltd. (GTB) for
                (i) Action for recovery of the outstanding            legal action in respect of all Ketan Parekh related NPA           the years 2000-01 (M/s Lovelock &
                      advances which have been diverted               accounts. As regards recovery in other NPA accounts, the          Lewes), 2001-02(M/s Lovelock &
                      and the other advances which have               bank has reported recovery of Rs.5.98 crores and Rs.9             Lewes) and 2002-03 (M/s Price
                      now been categorized as NPAs be                 crores during January 2003 and February 2003, respectively.       Waterhouse & Co.).
                      expedited.                                (ii) As regards any dereliction of duty on the part of the Bank         (i) For the year 2000-01: Members
                (ii) In case there is any dereliction of duty         Auditors, the matter has already been brought to the notice           answerable as Disclosed by the
                      on the part of the Bank Auditors, the           of Institute of Chartered Accountants of India (ICAI) by RBI.         Respondent firm i.e. M/s Lovelock
                      same may be referred to the Institute     (iii) The bank has been directed by RBI to take corrective action.          & Lewes:
                      of Chartered Accountants of India for     (iv) RBI has issued Instructions to its regional offices on             Shri S. Gopalakrishnan
                      further enquiry and appropriate action.         29.05.2002 to streamline and strengthen the system of             Shri P. Rama Krishna
                (iii) Even though there were no breach of             follow-up action on the findings of Annual Financial Inspection   Shri Manish Agarwal
                      regulations, it was observed that               of banks in a time bound manner. Details have given in reply      The Report with respect to S/Shri
                      certain loans were sanctioned without           to Para No.10.8.                                                  S.Goplakrishnan, R.Rama Krishna and
                      comprehensive evaluation and              (v) In order to review the capital market exposure of banks in a        Manish Agarwal had been listed for
                                                                      uniform and consistent manner, the Reserve Bank of India          consideration by the Council at its
                      therefore, the bank must ensure that
                                                                      is obtaining monthly reports on capital market exposure from      meeting scheduled on 8th November,
                      proper credit appraisal and monitoring
                                                                      all banks.                                                        2011, New Delhi.Thereafter, before the
                      system is in place.
                                                                As reported in December 2003                                            consideration of the said Report by the
                (iv) The procedural working of the banks
                                                                Follow up action is in progress.                                        Council, CA. P.Rama Krishna filed
                      must be strengthened and the RBI
                                                                As reported in June, 2004                                               Special Leave Petition in Supreme Court
                      must ensure that the rectification, if
                                                                RBI is following up the recovery of the amounts on a continuous         against the Order of the Learned Division
                      any, takes place in a time-bound
                                                                basis.                                                                  Bench of High Court of Delhi, the Council
                      manner.
                                                                As reported in December, 2004                                           while noting that the said SLP was yet to
                (v) In the immediate aftermath of the           Bank of India - Recovered Rs. 17.62 lakh during the period and          be listed and considering the facts and
                      Stock Market crash, RBI focused on        the balance outstanding was Rs. 121.43 crore as on June 30,             the circumstances of the case coupled
                      one new private bank although other       2004. The bank is going ahead with compromise settlement in             with the fact that written representation
                      private banks also had large exposure     respect of Ketan Parekh group entities with the approval of the         dated 11th December, 2009, Affidavit
                      to the capital market including some      Government of India.                                                    dated 3rd February, 2010 and additional
                      who had exceeded RBI limits. Now          Global Trust Bank Ltd. - Classified the accounts as NPAs has            papers have been received from him, the
                      that substantial information is           made 100% provision for the total exposure and filed criminal           Council decided to proceed further in the
                      available about all the banks             cases as well as cases with DRTs against parties.                       matter.
                      concerned,         the    Committee       ICICI Bank Ltd. - Recalled the loan in one account and suit is          Accordingly, the Council took up the
                      recommend RBI undertake a                 being filed.                                                            consideration of the Reports in the matter
                      thorough review and process matters       Centurion Bank Ltd. - Has fully written off the outstanding             of P.Rama Krishna and Manish Agarwal
                      relating to all concerned in a uniform    balance in accounts relating to Ketan Parekh entities and has           and decided as under:
                      and consistent manner.                    also initiated legal proceedings in DRT-II.                             Shri P.Ramakrishna was held guilty of
                                                                           12

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                                 Further Progress
                                                     Bank of Punjab Ltd. - Has filed recovery suits in DRT and issued     professional misconduct falling within the
                                                     notice under SARFAESI Act, 2002 for taking possession of             meaning of Clauses (6),(7),(8) & (9) of
                                                     property mortgaged.                                                  Part I of Second Schedule to the
                                                     Ratnakar Bank Ltd. - Loan against fixed deposit has since been       Chartered Accountants Act, 1949 and
                                                     fully adjusted.                                                      consequently recommended to the
                                                     The above banks have been advised by RBI to take effective           concerned High Court that his name be
                                                     steps to recover the entire amount from the Ketan Parekh entities    removed for 5 years from the Register of
                                                     expeditiously.                                                       Members.
                                                     As reported in July, 2005                                            The SLP filed by Shri P.Ramakrishna
                                                     (i) All the concerned banks have filed cases in DRT, Mumbai          came up before the Supreme Court on
                                                          against the companies concerned and their guarantors etc.       25th November, 2011 and the Supreme
                                                          As the number of cases pending against companies of Ketan       Court, inter alia, ordered as under:
                                                          Parekh Group is numerous, the proceedings in the DRT are        "Until further orders, final order shall not
                                                          slow. The process of recovery will take its own legal course.   be passed by the Respondent No.1 (ICAI)
                                                     (ii) ICAI have informed that they have called the comments/          in so far as petitioner (P.Ramakrishna)
                                                          explanations of the auditors concerned on 25.2.2005. The        herein is concerned".
                                                          concerned statutory auditors for the years 2001-02 and 2002-    The Hon'ble Supreme Court had directed
                                                          03 have sent in their respective responses dated 20th May,      the Respondent Institute to file its counter
                                                          2005 which have been received by ICAI on 24th May, 2005.        affidavit by 24th February, 2012 which the
                                                     The auditors have categorically stated in their aforesaid            Institute has filed and the next date of
                                                     responses that since the RBI has neither provided the relevant       hearing had been fixed for 26th March,
                                                     Annual Financial Inspection(s) and the basis/parameters adopted      2012. On 26th March, 2012, the Hon'ble
                                                     by the special auditors and has also restrained the ICAI from        High Court has directed the Union of India
                                                     parting with the Special Audit Report for perusal/examination by     to file their counter reply by 8th May,
                                                     the statutory auditors for the year 2001-02, they are not in a       2012. Irrespective of whether the counter
                                                     position to offer any view/explanation thereon. They had             reply is filed by the stipulated date, the
                                                     expressed their inability to offer their comments/explanation, in    next date of hearing has been fixed for
                                                     the absence of the relevant data/information/details. They have,     2nd July,2012.
                                                     however, added that they have conducted the respective audits        Shri Manish Agarwal was held guilty of
                                                     in accordance with the generally accepted accounting and             professional misconduct in terms of
                                                     auditing practices (GAAP) and the various pronouncements and         Notification No.1-CA (15)/60 dated 4th
                                                     accordingly requested the Institute to close the matter.             November, 1960 falling within the
                                                     Further examination of the matter is in process at ICAI.             meaning of Clause (7) of Part I of Second
                                                     As reported in December, 2005                                        Schedule to the Chartered Accountants
                                                     The documents/details sought by the respective respondent-           Act,      1949     and      consequently
                                                     firms for submission of their respective explanation were received   recommended to the concerned High
                                                     by ICAI from the RBI on 4th August, 2005 and the same were           Court that his name be removed for 3
                                                     forwarded on 5th August, 2005 to the respondent firms with           years from the Register of Members.
                                                                           13

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                                 Further Progress
                                                     stipulation that their explanation/comments should reach them         However, on the date of hearing, an
                                                     by 31st August, 2005.                                                 adjournment letter dated 8th November,
                                                     The respective respondent-firms have furnished their explanation      2011, has been received from the
                                                     /comments vide their letter dated 15.9.05 & 19.9.2005                 Respondent No. 1 i.e. S.Gopalakrishnan
                                                     respectively and the same is being examined and processed by          requesting therein that since he has been
                                                     the ICAI in terms of the provisions of Chartered Accountants          released on bail in the month of
                                                     Act, 1949 and the Regulations framed thereunder.                      November, 2011. Accordingly, he needs
                                                     As reported in May, 2006                                              some time to send his written
                                                     ICAI have informed that they are hopeful to complete the exercise     submissions, the Council decided to give
                                                     shortly.                                                              45 days time to the Respondent to submit
                                                     As reported in December, 2006                                         his written submissions and adjourned
                                                     ICAI have informed that based on the examination of latest inputs     the consideration of the Report in the said
                                                     received from the Oriental Bank of Commerce along with the            matter on 8th November, 2011.
                                                     earlier papers received from the RBI, Special Auditors,               Thereafter, Respondent No.1 i.e.
                                                     clarifications of the Statutory Auditors and other documents, a       S.Gopalakrishnan has also submitted his
                                                     finality has been reached on treating certain allegations as          written submissions vide letter dated 26th
                                                                                                                           December, 2011.
                                                     "information" under Section 21 of the Chartered Accountants
                                                                                                                           The Council considered the Report of
                                                     Act, 1949. Accordingly, the "information" letter(s) i.e., Show
                                                                                                                           the Disciplinary Committee on 26th-28th
                                                     Cause notice(s) have been issued to the concerned Statutory
                                                                                                                           March, 2012. On consideration of the
                                                     Auditors viz. M/s Lovelock & Lewes, Chartered Accountants,
                                                                                                                           report alongwith the written and oral
                                                     Kolkatta (for the year 2000-01) and M/s Price Waterhouse &
                                                                                                                           submissions of the Counsel for the
                                                     Co., Chartered Accountants, Kolkatta (for the year 2002-03) on
                                                                                                                           Respondent, the Council decided as
                                                     1.12.06 & 5.12.06 respectively.
                                                                                                                           under:
                                                     As reported in May, 2007
                                                                                                                           Shri S.Gopalakrishnan was held guilty of
                                                     ICAI have informed that written statement(s) from the member(s)       professional misconduct falling within the
                                                     answerable have been received and the matter would be placed          meaning of Clauses (6),(7), (80, & (9) of
                                                     before the Council in its next meeting scheduled to be held in        Part I of Second Schedule to the Chartered
                                                     the month of June 2007.                                               Accountants Act, 1949 and consequently
                                                     As reported in December, 2007                                         recommended to the concerned High
                                                     ICAI have informed that the matters relating to all the three years   Court that his name be removed for 5
                                                     i.e. 2000-01, 2001-02 and 2002-03 have been considered by             years from the Register of Members.
                                                     the Council at its meeting held between 16th and 18th August,         (ii) For the year 2001-02: Members
                                                     2007 for its prima facie opinion and the Council has referred all          answerable as Disclosed by the
                                                     these matters to the Disciplinary Committee for inquiry. The               Respondent firm i.e. M/s Lovelock
                                                     matters have been fixed for hearing by the Disciplinary                    & Lewes:
                                                     Committee scheduled to be held between 13th and 15th                  Shri Kersi H. Vachha
                                                     December, 2007.                                                       Shri Amal Ganguli
                                                                           14

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                                 Further Progress
                                                     As reported in May, 2008                                             In view of the Order of the Division Bench
                                                     ICAI have informed that in the meeting held on 13.12.07, the         of the Hon'ble High Court of Delhi, the
                                                     Reserve Bank of India, which was cited as one of the witnesses       Report with respect to S/Shri Kersi H.
                                                     in these matters had sought adjournment on the grounds that          Vachha and Amal Ganguli was listed for
                                                     they needed time to send the documents, the Disciplinary             consideration by the Council at its
                                                     Committee adjourned these matters to 22nd and 23rd April, 2008.      forthcoming meeting schedule to be held
                                                     During the hearing on 22nd April 2008, the respondents               on 8th and 9th November, 2011. On the
                                                     requested the Committee that they require 30 to 45 days time         date of hearing, a request for adjournment
                                                     for submitting their working papers which are quite voluminous       has been received from the Respondents,
                                                     in number. After considering the request of the respondents,         based on the circumstances mentioned
                                                     the Committee, on grounds of natural justice gave the last           by them and accordingly decided to
                                                     opportunity to the respondents to present their defence and          adjourn the Report of the Disciplinary
                                                     consequently adjourned the hearing.                                  Committee.
                                                     As reported in December, 2008                                        Thereafter, it was again fixed for
                                                     ICAI have informed that the hearing for the matter relating to the
                                                                                                                          consideration of the Disciplinary
                                                     year 2000-01 took place on 1.8.08 at Mumbai and the same
                                                                                                                          Committee Report by the Council on 14th
                                                     was concluded on that day itself. The respondents were
                                                                                                                          December, 2011. Meanwhile, the
                                                     requested to send certain documents as directed by the
                                                                                                                          Respondents had filed Writ Petition
                                                     Disciplinary Committee at the time of hearing and the same have
                                                                                                                          before the Hon'ble High Court of Bombay
                                                     been received from them. The Report of the Disciplinary
                                                                                                                          whereat after hearing both the parties, the
                                                     Committee is under preparation.
                                                                                                                          Hon'ble High Court of Bombay vide Order
                                                     Regarding matters relating to the year 2001-02 and 2002-03,
                                                     they have informed that the matter has been adjourned to 6th &       dated 15th December,2011 passed the
                                                     7th October 2008 at Mumbai. On 6.10.08, the matter was part          interim order which are as under:
                                                     heard and adjourned to 8.11.08.                                      " In the meanwhile, so far as the interim
                                                     As reported in June, 2009                                            protection is concerned, in our view, it
                                                     ICAI have informed as under :                                        would be just and proper to allow the first
                                                     (i) The hearing in the matter(s) relating to the years 2000-01       respondent to hear the petitioners on the
                                                     and 2001-02 has been concluded by the Disciplinary Committee         report of the Disciplinary Committee and
                                                     and the said Reports are included in the agenda of the Council       after hearing the petitioners if any final
                                                     Meeting for its final consideration. If these Reports are accepted   decision is taken, no further steps should
                                                     by the Council, it would be recommending the punishment to           be taken on the basis of such final report
                                                     the concerned High Court(s) for its final approval.                  till the next date of hearing."
                                                     (ii) The hearing in the matter relating to 2002-03 has been          The matter came up for hearing on 1st
                                                     concluded on 23.03.09 by the Disciplinary Committee but              March, 2012 and the counsels for both the
                                                     thereafter, the Respondents had filed a Writ Petition before the     sides submitted before the Court that since
                                                     Hon'ble High Court of Bombay. The Hon'ble High Court has             the Special Leave petition has been filed
                                                     passed its Orders and the same are under consideration by the        by one of the petitioners in the Global Trust
                                                     Disciplinary Committee for further course of action.                 Bank matter pertaining to the financial year
                                                                           15

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                                  Further Progress
                                                     As reported in December, 2009                                          2000-01 is to come up for hearing before
                                                     As regards the hearing in the matter relating to the year 2000-        the Hon'ble Supreme Court on 26th March,
                                                     01 is concerned, ICAI have informed that after the hearing was         2012. However, the interim orders which
                                                     fixed in the month of March and April, 2009, adjournment               were passed by the Hon'ble High court of
                                                     requests from the Respondents was received which was                   Bombay on 15th December, 2011
                                                     acceded to and accordingly the said Report was included in the         continued. Further, they requested the
                                                     Agenda of the Council Meeting to be held from 8th to 10th of           Court to take up the matter after hearing
                                                     August, 2009. In the said meeting, the Respondents, namely,            the Hon'ble Supreme Court takes place.
                                                     Shri P. Ramakrishna and Shri Manish Agarwal requested for              Accordingly, the next date of hearing has
                                                     adjournment on the ground that their partner, Shri S.                  been fixed for 23rd April, 2012.
                                                     Gopalakrishnan was not available. The Council on their request         In consonance with the interim orders of
                                                     adjourned the matter for the last time and further directed the        Hon'ble High Court of Bombay that after
                                                     Office to have a copy of the Disciplinary Committee Report served      taking final decision, no further steps
                                                     on Shri S. Gopalakrishnan in the jail which has been duly served       would be taken on the basis of such final
                                                     on him in the jail. Further, Shri S. Gopalakrishnan has written a      report by the Council of the Institute till
                                                     letter dated 8th August, 2009 wherein he had requested to defer        the next date of hearing by the Hon'ble
                                                     the hearing in the case till his release on bail.                      High Court.
                                                     The said report would be placed before the Council at its next         The next date of hearing has been fixed
                                                     meeting to be held on 16th & 17th December 2009.                       on 16th July, 2012 and in the meanwhile,
                                                     A As regards, the hearing in the matter relating to the year 2001-     the interim orders of the Hon'ble High
                                                     02 is concerned, it is informed that the said Report has been          Court are still continuing.
                                                     included in the Agenda of the Council and the Council after            The consideration of the Report of the
                                                     consideration of this Report along with the written submissions        Disciplinary Committee with respect to S/
                                                     of the Respondent, if any, if accepts the Report of the Disciplinary   Shri Kersi H. Vachha and Amal Ganguli
                                                     Committee would recommend the punishment to the concerned              was fixed for 26th - 28th March, 2012.
                                                     High Court.                                                            On consideration of the Report of the
                                                          In context with the hearing relating to the year 2002-03 and      Disciplinary Committee alongwith written
                                                     further to the hearing concluded on 23rd of March, 2009, it is to      submission made by the authorized
                                                     mention that the Respondents had filed Writ Petition in the            representative, the Council held the
                                                     Hon'ble High Court of Bombay and the Hon'ble High Court vide           Respondents are guilty of professional
                                                     its Order dated 16th April, 2009 had given certain directions to       misconduct falling within the meaning of
                                                     the Disciplinary Committee. In compliance with the directions,         Clauses (5), (6), (7), (8) and (9) of 1 Part
                                                     the Hon'ble High Court of Bombay, the Disciplinary Committee           of the Second Schedule to the Chartered
                                                     passed its Speaking Order dated 8th July, 2009 and the same            Accountants         Act,     1949       and
                                                     was informed to the Respondents vide Institute's letter dated          recommended to the High Court that the
                                                     18th July, 2009 in which fresh date(s) of hearing were also            name of the Respondents be removed
                                                     intimated to them i.e. on 20th and 21st August, 2009 at Mumbai.        from the Register of Members for a period
                                                     On receipt of the notice for fixation of hearing in the month of       of Five years.
                                                                            16

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                                   Further Progress
                                                     August, 2009, the Respondents again raised certain issues               (iii) For the year 2002-03: Members
                                                     relating to the enquiry which were clarified to them vide Institute's         answerable as Disclosed by the
                                                     letter dated 12th of August, 2009. In furtherance to that, the                Respondent firm i.e. M/s Price
                                                     Respondents moved the Hon'ble High Court in the month of                      Waterhouse & Co. :
                                                     August, 2009 and the same came up for hearing on 15th of                Shri Partha Ghosh
                                                     August, 2009 wherein the Hon'ble High Court directed the                Shri D.V. P Rao
                                                     Disciplinary Committee to give all the documents which are relied        In view of the Order of the Division Bench
                                                     upon by the Disciplinary Committee against the Respondents              of the Hon'ble High Court of Delhi and
                                                     within two weeks' time. In compliance with the Order of the             thereafter filing of Special Leave Petition
                                                     Hon'ble High Court of Mumbai, though all the documents were             by one of the answerable Respondent(s)
                                                     parted with the Respondent, yet all the documents as received           i.e. P.Ramakrishna and thereafter the Writ
                                                     from the witnesses i.e. Reserve Bank of India and the Special           Petitions filed by M.K.H.Vachha and
                                                                                                                             Mr.Amal Ganguly before the Hon'ble High
                                                     Auditors were sent once again to the Respondents and notices
                                                                                                                             Court of Bombay, the hearing is yet to be
                                                     were issued for the next date of hearing to be held on 16th and
                                                                                                                             fixed again in respect of these matter(s).
                                                     17th of September, 2009. The said notice was issued on 25th of
                                                     August, 2009 to the Respondents including the witnesses.
                                                     The Respondents again moved the Hon'ble High Court of
                                                     Bombay and filed Contempt of Court Petition before the Hon'ble
                                                     High Court against the Disciplinary Committee of the Institute
                                                     on 9th of September, 2009. The said matter came for hearing on
                                                     11th of September, 2009 for which a short adjournment was
                                                     sought and the same came up for hearing on 15th of September,
                                                     2009. It was brought to the notice of the Hon'ble Court that all
                                                     the documents as received from the witnesses have already
                                                     been parted to the Respondents and the letter to the said effect
                                                     had also been sought from the Reserve Bank of India which
                                                     was placed before the Hon'ble High Court on 15th of September,
                                                     2009 and once again all the documents which were earlier
                                                     provided to the Respondents were again given to them before
                                                     the Hon'ble High Court. The said hearing in the matter was again
                                                     postponed which was scheduled to be held on 16th and 17th of
                                                     September, 2009 on the directions of Hon'ble High Court.
                                                     The Hon'ble Court was of the view that it was not necessary to
                                                     pursue the exercise of the Contempt Jurisdiction. The Contempt
                                                     Petition was accordingly disposed off.
                                                          Now, the next date of hearing in the said matter is most
                                                     likely to be fixed on 15th & 16th January, 2010.
                                                                            17

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                            Further Progress
                                                     As reported in May, 2010
                                                     The ICAI have informed that latest progress made in the matter
                                                     is as under:
                                                     a) For the year 2000-01: Members answerable Disclosed by
                                                             the Respondent firm
                                                                Shri S. Gopalakrishnan
                                                                Shri P. Rama Krishnan
                                                                 Shri Manish Agarwal
                                                     On consideration of the Report of the Disciplinary Committee,
                                                     the Council accepted the Report of the Disciplinary Committee
                                                     with respect to CA. P. Rama Krishna and held the Respondent
                                                     guilty of professional misconduct falling within the meaning of
                                                     Clauses (6), (7), (8) & (9) of Part I of Second Schedule to the
                                                     Chartered Accountants Act, 1949 and recommended to the
                                                     concerned High Court that his name be removed for 5 years from
                                                     the list of members. Thereafter, he has filed a Writ Petition in the
                                                     Hon'ble Delhi High Court. Counter affidavit has been filed by the
                                                     Institute and the Respondent has sought time from the Court to
                                                     file their rejoinder and, accordingly, the case was listed for hearing
                                                     on 12th April, 2010 and no further progress has been received.
                                                     Further, the Council accepted the report of Disciplinary
                                                     Committee with respect to CA. Manish Agarwal and held the
                                                     respondent guilty of as per notification no. 1-CA(15)/60 dated
                                                     4th November, 1960, falling within the meaning of Clause (7) of
                                                     Part I of Second Schedule to the Chartered Accountants Act,
                                                     1949 and recommended to the concerned High Court that his
                                                     name be removed for 3 years from the list of members.
                                                     As regards CA. S.Gopalakrishnan is concerned, since he was
                                                     in judicial custody, the Council has decided to send one final
                                                     notice to him informing that his report would be heard by the
                                                     Council after 60 days. Accordingly, the notice is being sent to
                                                     him to send his written representation or to send his counsel to
                                                     appear before the Council at its next meeting to be held between
                                                     3rd and 5th May, 2010.
                                                     b) For the year 2001-02: Members answerable Disclosed by
                                                            the Respondent firm
                                                             Shri Kersi H. Vachha
                                                             Shri Amal Ganguli
                                                                           18

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                         Further Progress
                                                     The Report of the Disciplinary Committee has been included in
                                                     the Agenda of the Council which is most likely to be considered
                                                     in its next meeting to be held between 3rd and 5th May, 2010.
                                                     The Council after consideration of this Report along with the
                                                     written submissions of the Respondent(s), if any, if accepts the
                                                     Report of the Disciplinary Committee would recommend the
                                                     punishment to the concerned High Court.
                                                     c) For the year 2002-03: Members answerable Disclosed by
                                                           the Respondent firm
                                                            Shri Partha Ghosh
                                                            Shri D. V. P. Rao
                                                      The hearing(s) fixed in the month of January and February,
                                                      2010 were adjourned at the request of Respondent(s). The
                                                      hearing in this matter was scheduled for 6th and 7th April, 2010
                                                      at New Delhi and no further progress has been received.
                                                      As reported in December, 2010
                                                     (i)For the year 2000-01: Members answerable as disclosed by
                                                        the Respondent firm i.e. M/s Lovelock & Lewes:
                                                               Shri S. Gopalakrishnan
                                                               Shri P. Rama Krishna
                                                               Shri Manish Agarwal
                                                               All the three Respondent- members have been found
                                                             prima facie guilty by the Council of ICAI. Enquiry against
                                                             them has been completed by the Disciplinary Committee
                                                             and Reports submitted to the Council of ICAI. The Council,
                                                             on consideration of the respective Reports had accepted
                                                             the same.The subsequent developments in the matter
                                                             are as under:
                                                      (a) Shri S.Gopalakrishnan has been granted bail and
                                                           consequently he is not under custody now.
                                                      (b) Shri P. Rama Krisha has filed a Writ Petition in the Hon'ble
                                                           High Court of Delhi against the decision of the Council.
                                                     The Hon'ble High Court of Delhi concurred, inter alia, with the
                                                     plea of Shri P. Rama Krishna about the non-applicability of the
                                                     provisions of the Chartered Accountants Act, 1949 (pre-
                                                     amended) and has held that disciplinary proceedings in the
                                                     instant matter against the Respondent should recommence from
                                                                            19

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                            Further Progress
                                                     the stage specified by it (i.e. from formation of prima facie opinion)
                                                     and would continue only under the amended provisions of the
                                                     Chartered Accountants Act and not under the pre-amended
                                                     Section 21 of the Act.
                                                     The ICAI has filed an appeal against the Order of the Hon'ble
                                                     High Court of Delhi in the matter.
                                                     The Court has fixed the said matter for final disposal on 8th
                                                     December, 2010.
                                                     In view of aforesaid Order of the Hon'ble High Court of Delhi, MCA
                                                     have been legally advised not to initiate any further action even in
                                                     the case of Shri S. Gopalakrishnan and Shri Manish Agarwal.
                                                     (ii) For the year 2001-02: Members answerable as disclosed
                                                           by the Respondent firm i.e. M/s Lovelock & Lewes:
                                                                Shri Kersi H. Vachha
                                                                Shri Amal Ganguli
                                                      The two Respondent-members have been found prima facie
                                                          guilty by the Council of ICAI.
                                                      Enquiry against them has been completed by the Disciplinary
                                                          Committee and Reports submitted to the Council;
                                                      Reports of the Disciplinary Committee were slated for
                                                          consideration by the Council at its meeting held between
                                                          3rd and 5th May, 2010. However, an adjournment request
                                                          was received on behalf of the Respondent(s) seeking time
                                                          till 31st of May, 2010 to send their written representations
                                                          which has been acceded to. Thereafter, another request for
                                                          extension of time was received seeking time till 30th of June,
                                                          2010 to send their written representations which has also
                                                          been acceded to with a stipulation that this is the final
                                                          extension of time. Meanwhile, another request for extension
                                                          to send their written representation has been received vide
                                                          letter dated 29th June, 2010, which has not been acceded
                                                          to.
                                                     It is pertinent to mention here that it is most likely that on the
                                                     basis of the favaourable Order of the Hon'ble High Court of Delhi
                                                     in case of Shri P Rama Krishna, the Respondent-members for
                                                     the year 2001-02 may cite the Order of the Hon'ble High Court
                                                     of Delhi on the Writ Petition filed by Shri P. Rama Krishna and
                                                     seek similar treatment.
                                                                          20

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                        Further Progress
                                                     (iii) For the year 2002-03: Members answerable as disclosed
                                                            by the Respondent firm i.e. M/s Price Waterhouse & Co.:
                                                                     Shri Partha Ghosh
                                                                     Shri D.V. P Rao
                                                       All the two Respondent- members have been found prima
                                                             facie guilty by the Council of ICAI;
                                                       Eight hearings had been held by the Disciplinary Committee
                                                             till March 2010. Further hearing was fixed on 1st May,
                                                             2010.
                                                               It is submitted that every effort is being made by ICAI
                                                     through the applicable Court of Law to get the Order of the
                                                     Hon'ble High Court of Delhi in favour of Shri P Rama Krishna
                                                     reversed. The ICAI is waiting for the outcome of the Appeal
                                                     filed by it against the said Order of the Hon'ble High Court of
                                                     Delhi (Single Judge)
                                                     As reported inJune, 2011
                                                        (i) For the year 2000-01: Members answerable as Disclosed
                                                        by the Respondent firm i.e. M/s Lovelock & Lewes:
                                                        Shri S. Gopalakrishnan
                                                        Shri P. Rama Krishna
                                                        Shri Manish Agarwal

                                                      The case is pending in the Hon'ble High Court of Delhi and
                                                      the next date of hearing in the matter is 31.5.2011.

                                                      (ii) For the year 2001-02: Members answerable as Disclosed
                                                      by the Respondent firm i.e. M/s Lovelock & Lewes:

                                                      Shri Kersi H. Vachha
                                                      Shri Amal Ganguli

                                                      No change in status.
                                                      (iii) For the year 2002-03: Members answerable as Disclosed
                                                      by the Respondent firm i.e. M/s Price Waterhouse & Co.:
                                                      Shri Partha Ghosh
                                                      Shri D.V. P Rao

                                                      No change in status.
                                                                          21

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                        Further Progress
                                                     As reported in December, 2011
                                                     (i) For the year 2000-01: Members answerable as Disclosed by
                                                     the Respondent firm i.e. M/s Lovelock & Lewes:
                                                     Shri S. Gopalakrishnan
                                                     Shri P. Rama Krishna
                                                     Shri Manish Agarwal
                                                     A Division Bench of the Hon'ble High Court of Delhi on 31.5.2011,
                                                     heard the case and reserved the pronouncement of the
                                                     judgement. It pronounced its judgement on 30th September,2011
                                                     which is, inter alia, as under:
                                                      "Para 37- The intention of the legislation in enacting - Section
                                                     21-D of the Chartered Accountants Act, 1949 is to draw out or
                                                     make a distinction between the cases pending before the Council
                                                     on a complaint or on information, and ensure that the amended
                                                     provisions would apply to a fresh complaint or information and
                                                     the unmended Act will apply to the pending complaints or
                                                     information. It is inconceivable and there is no good reason or
                                                     cause why distinction should be made between 'information' and
                                                     'complaint' for the purpose of deciding whether the amended or
                                                     unamended provision would apply. The legislation intent behind
                                                     incorporating Section 21 D is to make the legal position beyond
                                                     doubt or cavil so that there is no dispute. Even under Section 6
                                                     of the General Clauses Act the position is the same. In these
                                                     circumstances, we would prefer the interpretation placed by the
                                                     appellant on the word 'complaint' as used in Section 21D. The
                                                     word complaint includes information cases which were pending
                                                     before the Council on 17th November, 2006. In the facts of the
                                                     present matter as discussed above, proceedings or complaint in
                                                     the form of information was pending before the council on 17th
                                                     November, 2006 and accordingly the unamended provisions will
                                                     apply."
                                                     "Para 38- In view of the aforesaid reasoning, the present appeal
                                                     is allowed and it is held that the procedure prescribed by the
                                                     amended C.A. Act, 1949 i.e. Sections 21, 22 and 22A would be
                                                     applicable to pending proceedings in information case and not
                                                     the procedure prescribed after the amendment made by the
                                                     Chartered Accountants (Amendment) Act, 2006. As already held
                                                     above, the appellants have not challenged the other findings and
                                                                                    22

Sl. No. Para No. Observation/Recommendation of JPC                         Reply of Government/Action Taken                                Further Progress
                                                              directions given by the learned Single Judge. The appeal is
                                                              accordingly disposed of. In the facts of the case, there will no
                                                              order as to costs."
                                                              ICAI has informed that in view of above, the Report with respect
                                                              to S/Shri S.Gopalakrishnan, P.Rama Krishna and Manish
                                                              Agarwal is listed for consideration by the Council of the ICAI at
                                                              its meetings scheduled to be held on 8th and 9th November,
                                                              2011 at New Delhi.
                                                              (ii) For the year 2001-02: Members answerable as Disclosed by
                                                              the Respondent firm i.e. M/s Lovelock & Lewes:
                                                              Shri Kersi H. Vachha
                                                              Shri Amal Ganguli
                                                              ICAI has informed that in view of the Order of the Division Bench
                                                              of the Hon'ble High Court of Delhi, the Report with respect to S/
                                                              Shri Kersi H. Vachha and Amal Ganguli is listed for consideration
                                                              by the Council at its meeting scheduled to be held on 8th and 9th
                                                              November,2011.
                                                              (iii) For the year 2002-03: Members answerable as Disclosed
                                                              by the Respondent firm i.e. M/s Price Waterhouse & Co.:
                                                              Shri Partha Ghosh
                                                              Shri D.V. P Rao
                                                              ICAI has informed that in view of the Order of the Division Bench
                                                              of the Hon'ble High Court of Delhi, the hearing by the Disciplinary
                                                              Committee in the matter(s) relating to S/Shri Partha Ghosh and
                                                              D.V.P. Rao is scheduled to be held in the month of November-
                                                              December, 2011.


4.       7.51   SEBI furnished four sets of interim reports   As reported in May, 2003                                              No change in status.
                inclusive of its investigation regarding      Enforcement Directorate has informed that JPC has commented
                scrips of certain corporate bodies. The       on the suspect roles of 15 promoters and Corporate entities.
                Committee's insistence for SEBI's final       Files in respect of 15 promoters / companies stated to be close
                findings regarding the role of promoters/     to Ketan Parekh were opened by them to determine the nexus
                corporate bodies in the price manipulation    with brokers through OCB's and FII's and to trace violation of
                of the scrips yielded yet another set of      RBI/SIA norms while transferring equity to OCB's and FII's. The
                reports most of which were again of           promoter companies can be divided into two parts:-
                interim nature and were received as late      1. Out of the 15 companies mentioned in the JPC report, there
                as in November 2002. Due to                       are companies, where certain enquiries which might have a
                                                                                   23

Sl. No. Para No. Observation/Recommendation of JPC                       Reply of Government/Action Taken                         Further Progress
               non-availability of Final Report from              FEMA angle were still pending. These comprise the a) DSQ
               SEBI, the Committee could not have the             group, b)Zee Telefilms Ltd., c)HFCL, d)Global Telesytems,
               opportunity to take oral evidence of these         e)Global Trust Bank, f)Silverline Technologies, g)SSI Ltd.
               corporate bodies. The Committee urge          2. With regard to the second group, the Enforcement
               SEBI, the Department of Company Affairs            Directorate's inquiries have been directed against these
               and other investigative agencies to                promoter companies where certain details have been called
               expedite       and    complete        their        for. This group comprises a)Adani Exports, b)Padmini
               investigations into involvement of                 Technologies c)Aftek Infosys, d)Satyam Computers e)
               promoters/corporate houses in                      Ranbaxy Ltd. f) Lupin Labs g) Pentamedia Graphics h)
               manipulation of prices of scrips which             Shonkh Technologies.
               were found to have undergone unusual          In addition to the 15 promoters and corporate entities mentioned
               volatility. The Government should take        in JPC report, on the basis of SEBI report suggesting the specific
               appropriate action under the provisions       involvement in market manipulation and their proximity to Ketan
               of the relevant laws on the basis of          Parekh, the Enforcement Directorate has initiated investigation
               outcome of their findings. Expeditious        in respect of the following companies:
               action should be taken against those          a)Maars Technologies, b) Mascon Global, c) Mukta Arts, d)
               involved wherever the involvement of          Tips Industries, e) Balaji Telefilms , f) Kopran Group, g) Nirma
               promoter/corporate house is established.      Group, h) Cadilla group.
                                                             Investigations by the Enforcement Directorate in respect of these
                                                             23 promoters/companies are in progress.
                                                             Action taken by SEBI is covered in Para 2.15.
                                                             As reported in December, 2003
                                                             The Enforcement Directorate had also initiated investigation in
                                                             respect of 8 more companies. Thus, the total number of
                                                             companies, which were under investigation by Enforcement
                                                             Directorate, was 23.
                                                             Out of these 23 companies, in respect of one company i.e. DSQ
                                                             Group, the investigation has been completed and Show Cause
                                                             Notices have been issued under both FERA & FEMA. In respect
                                                             of M/s Maars Technologies and Silverline Technologies Ltd.,
                                                             investigation on one aspect i.e. non-realisation of export
                                                             proceeds have since been completed and Show Cause Notices
                                                             have been issued under FEMA on 11.6.2003 and 8.10.2003
                                                             respectively.
                                                             Investigations in respect of the remaining 20 companies are at
                                                             a very advanced stage.
                                                                           24

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                         Further Progress
                                                     As reported in June, 2004
                                                     Investigations by Enforcement Directorate are in progress.
                                                     As reported in December, 2004
                                                     Out of 23 companies, Show Cause Notice (SCN) to one more
                                                     company i.e. M/s Lupin Ltd. (apart from 04 companies against
                                                     whom SCNs have already been issued) has been issued on 2/
                                                     9/2004 leaving 18 companies against whom investigations are
                                                     at a very advanced stage.
                                                     Besides, part investigations have been completed against one
                                                     more company viz. M/s Shonkh Tech. Ltd. and a show cause
                                                     notice for non-realisation of export proceeds has been issued.
                                                     However, further investigations in this case are also being carried
                                                     out on the basis of documents received from the CBI.
                                                     In another company of M/s Ketan Parekh, a show cause notice
                                                     has been issued to M/s Classic Credit Ltd. and M/s Panther Fin
                                                     Cap Ltd. (both Ketan Parekh entities in India) alongwith Shri Ketan
                                                     Parekh. However, some more investigations are being carried
                                                     out.
                                                     Further, a show cause notice issued to M/s DSQ Software Ltd.
                                                     has been adjudicated by imposing a penalty of Rs.2 crore on
                                                     the company and Rs.2 crore on Shri Dinesh Dalmia.
                                                     As reported in July, 2005
                                                     Enforcement Directorate has informed that out of 23 companies,
                                                     Show Cause Notices against seven companies have been
                                                     issued. Investigation against remaining 16 companies is at an
                                                     advance stage.
                                                     As reported in December, 2005
                                                     No change in the status.
                                                     As reported in May, 2006
                                                     No change in the status.
                                                     As reported in December, 2006
                                                     Out of remaining 16 companies, investigation against one more
                                                     company i.e. M/s Mascon Global has been finalised, which ended
                                                     in closure of the case.
                                                     Investigations against remaining 15 companies are at final stage.
                                                     As reported in May, 2007
                                                     No change in the status.
                                                                          25

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                       Further Progress
                                                     As reported in December, 2007
                                                     No change in the status.
                                                     As reported in May, 2008
                                                     Enforcement Directorate have informed that :
                                                     (i) Show Cause Notice (SCN) dated 31.1.2008 was issued to
                                                     M/s Balaji Telefilms Ltd., its Chairman Shri Jitendra Kapoor and
                                                     its MD Smt. Shobha Kapoor for contravention of the provisions
                                                     of Sec. 6(3)(b) of FEMA 1999 read with Regulation 4 of Foreign
                                                     Exchange Management (Transfer or Issue of Security by a
                                                     Person Resident Outside India) Regulations 2000, involving an
                                                     amount of Rs. 10,46,50,000 being market value of 8,05,000
                                                     shares @ Rs. 130/- per share.
                                                     (ii) Show Cause Notice dated 19.6.2006 was issued to M/s Tips
                                                     Industries Ltd. and its CMD Shri. Kumar S. Taurani for
                                                     contravention of the provisions of Sec. 6(3)(a) of FEMA 1999
                                                     read with Regulations 5,6 & 13 of Foreign Exchange
                                                     Management (Transfer of Issue of any Foreign Security)
                                                     Regulations 2000, involving an amount of US$7,54,100.
                                                     The above SCN was adjudicated on 27.11.2006, imposing
                                                     penalty of Rs.70 lakhs on M/s Tips Industries Ltd.and Rs.20
                                                     lakhs on Shri Kumar S. Taurani, CMD.
                                                     (iii) Show Cause Notice issued to M/s Maars Software Ltd. on
                                                     11.6.2003 for non-realisation of export proceeds has been
                                                     adjudicated on 13.3.2008, imposing penalty of Rs. 4 crores on M/
                                                     s Maars Software Ltd. and Rs. 1 crore on Shri T. Varadharajan,
                                                     MD.
                                                     As reported in December, 2008
                                                     Enforcement Directorate has informed as under:
                                                     Mukta Arts : Investigations completed. SCN issued in this case
                                                     has been adjudicated on 11.8.08 imposing a total penalty of
                                                     Rs.4,58,000. Action in respect of this company may be treated
                                                     as complete.
                                                     SSI Ltd.: Investigations completed. Since no contravention of
                                                     the provisions of FERA/FEMA was noticed, the case has been
                                                     closed. Action in respect of this company may be treated as
                                                     complete.
                                                                          26

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                        Further Progress
                                                     Satyam Computers : Investigations completed. Complaint filed
                                                     by I.O. for contravention of provisions of FEMA is under
                                                     consideration for issuance of SCN.
                                                     HFCL : Investigations completed. SCN for contravention of
                                                     provisions of FEMA issued in Sept. 2008.
                                                     Adani Exports : Investigations completed. SCN for contravention
                                                     of provisions of FEMA issued in Sept. 2008.
                                                     M/s Greenfield Investments Ltd.: Investigations completed.
                                                     Complaint for contravention of provisions of FEMA is under
                                                     preparation.
                                                     As reported in June, 2009
                                                     Enforcement Directorate has informed as under:
                                                     M/s. Satyam Computers Ltd. ­ The Proposed SCN was not
                                                     issued in this case as the recent developments in the detection
                                                     of fraudulent export documentation adopted by the erstwhile
                                                     Management of the company has cast serious doubts on the
                                                     extent of actual export proceeds outstanding. Hence the matter
                                                     is being looked into afresh.
                                                     M/s. Himachal Futuristic Communications Ltd. ­ The
                                                     Adjudicating Authority has been advised to finalise the
                                                     adjudication proceedings by 30.06.2009.
                                                     M/s. Adani Exports Ltd. ­ The Adjudicating Authority has been
                                                     advised to finalise the adjudication proceedings by 30.6.2009.
                                                     M/s Balaji Telefilms Ltd. ­ Subsequent to the issuance of Show
                                                     Cause Notice on 31.01.2008 by the Directorate of Enforcement,
                                                     M/s Balaji Telefilms Ltd., its Chairman Shri Jitender Kapoor, and
                                                     its Managing Director Smt. Shobha Kapoor applied to RBI for
                                                     compounding of contravention involved in the SCN. RBI
                                                     compounded the contravention vide its order dated 31.10.2008
                                                     in the sum of Rs. 5,00,000/-which has since been paid by them.
                                                     Hence, no further action under FEMA is required as the matter
                                                     has attained finality. Action against this company may be treated
                                                     as complete.
                                                     M/s. Global Telesystems Ltd. ­ Investigations in this case have
                                                     been completed; no contravention under FEMA has been
                                                     noticed. Hence the case has been closed. In view of this, action
                                                     againstthis company may be treated as complete.
                                                                           27

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                         Further Progress
                                                     M/s Global Trust Bank ­ Investigations in this case have been
                                                     completed. In all, 6 SCNs had been issued to M/s. Global Trust
                                                     Bank and others. On conclusion of adjudication proceedings,
                                                     charges against M/s Global Trust Bank in all the 6 SCNs have
                                                     been dropped and the case stands closed. Hence, action
                                                     against this company may be treated as complete.
                                                     M/s Padmini Technologies Ltd. ­ Dy. Director, Delhi Zone has been
                                                     advised to complete the investigations in a time bound manner.
                                                     M/s Aftek Infosys Ltd. ­ Investigations in this case have been
                                                     completed; no contravention under FEMA has been noticed.
                                                     Hence the case has been closed. Action against this company
                                                     may be treated as complete.
                                                     M/s Kopran Group ­ Investigations in this case have been
                                                     completed; no contravention under FEMA has been noticed.
                                                     Hence the case has been closed. Action against this company
                                                     may be treated as complete.
                                                     M/s. Nirma Group ­ Investigations in this case have been
                                                     completed; no contravention under FEMA has been noticed.
                                                     Hence the case has been closed. Action against this company
                                                     may be treated as complete.
                                                     M/s. Cadilla Group ­ Investigations in this case have been
                                                     completed; no contravention under FEMA has been noticed.
                                                     Hence the case has been closed. Action against this company
                                                     may be treated as complete.
                                                     M/s Ranbaxy Laboratories Ltd. ­ Special Director, Mumbai Zone
                                                     has been advised to complete the investigations in a time bound
                                                     manner.
                                                     M/s Pentamedia Graphics Ltd. ­ Dy. Director, Chennai Zone has
                                                     been advised to complete the investigations in a time bound manner.
                                                     M/s Zee Telefilms Ltd. ­ Investigations in this case had been
                                                     completed and one SCN dated 23.07.2004 was issed for various
                                                     contraventions of FEMA as reported earlier in ATR for December
                                                     2004 with reference to para 12.121 of the JPC Report.
                                                     Adjudication proceedings are in progress The Adjudicating
                                                     Authority has been advised to finalise the adjudication
                                                     proceedings by 30.06.2009.
                                                                               28

Sl. No. Para No. Observation/Recommendation of JPC                 Reply of Government/Action Taken                        Further Progress
                                                     M/s Silverline Technologies Ltd. ­ SCN issued to M/s Silverline
                                                     Technologies Ltd. and others on 18.10.2003 has been
                                                     adjudicated on 30.03.2009 imposing penalty as under:
                                                                                                          (Rs. in crore)
                                                     M/s Silverline Technologies Ltd.                 :         20.00
                                                     Sh. Ravi Subramaniam, Chairman                   :          1.00
                                                     Sh. Krishna Kumar Subramaniam, Vice President    :          1.00
                                                     Sh. K. Kulathu Subramaniam, Director             :          0.50
                                                     Total                                            :         22.50
                                                     In view of the above, action against this company may be treated
                                                     as complete.
                                                     M/s Lupin Laboratories Ltd. ­ Investigations in this case have
                                                     been completed. One SCN for contravention of FEMA issued
                                                     on 02.09.2004 was adjudicated on 27.02.2007, whereby the
                                                     charge against the company was dropped. Action against this
                                                     company may be treated as complete.
                                                     M/s. Shonkh Technologies International Ltd. ­ One SCN issued
                                                     to the company and its Directors on 20.09.2004 has been
                                                     adjudicated in 2005, imposing penalty as under:
                                                                                                          (Rs. in lakhs)
                                                     M/s Shonkh Technologies International Ltd.       :            35
                                                     Sh. Prashant Kumar, Director                     :             5
                                                     Sh. S.N.Malik, Director                          :             1
                                                     Sh. C.R.V. Rao, Director                         :             1
                                                     Sh. Vivek Nagpal, Director                       :             1
                                                     Sh. Ravi Krishna Moorthy, Director               :             1
                                                     In view of the above, action against this company may be treated
                                                     as complete.
                                                     Note: Investigation against M/s Classic Credit Ltd. and M/s
                                                     Panther Fin Cap Ltd. (Ketan Parekh entities) ­ was taken up as
                                                     a follow up action in the case of M/s DSQ Group as it was found
                                                     that they had taken a loan of Rs. 162.5 crores in the form of
                                                     shares of M/s DSQ Industries Ltd. from an OCB called M/s
                                                     Greenfiled Investments Ltd., Mauritius. A Show Cause Notice
                                                     was issued to M/s Classic Credit Ltd., M/s Panther Fin Cap Ltd.,
                                                     Shri Ketan Parekh and Shri Kartik Parekh alongwith M/s
                                                                           29

Sl. No. Para No. Observation/Recommendation of JPC               Reply of Government/Action Taken                         Further Progress
                                                     Greenfield Investments Ltd. and others. The SCN was
                                                     adjudicated imposing a total penalty of Rs.327 crores out of which
                                                     an aggregate penalty of Rs.172 crores was imposed on M/s
                                                     Clasic Credit Ltd., M/s Panther Fin Cap Ltd., Shri Ketan Parekh
                                                     and Shri Kartik Parekh. No further investigation/ action is
                                                     pending against the aforesaid two KP entities.
                                                     As reported in December, 2009
                                                     In the earlier Progress Report, action has been treated as
                                                     complete in respect of 15 Companies out of 23 Companies. The
                                                     position reported by Deptt. of Revenue/Enforcement Directorate,
                                                     in respect of remaining Companies is given in the table below:
                                                     (i) M/s Satyam Computer Ltd.- As reported earlier the extent of
                                                     actual export proceeds pending realization is now being re-
                                                     confirmed in the light of the allegation of fraudulent exports
                                                     documentation in the charge-sheet filed by CBI. Fresh enquiries
                                                     are under way.
                                                     (ii) M/s Himachal Futuristic Communications Ltd.- Case has
                                                     been Adjudicated on 11.05.2009. Charges have been dropped.
                                                     No action now remains pending in this case. Action against this
                                                     company may be treated as complete.
                                                     (iii) M/s Adani Exports Ltd.- Case has been Adjudicated vide order
                                                     dated 11.05.2009 wherein following penalties have been imposed:-
                                                     M/s Adani Exports      = Rs.4,10,00,000/-
                                                     Shri Rajesh Adani, MD = Rs.1,02,00,000/-
                                                     Total                  = Rs.5,12,00,000/-
                                                     No further action now remains pending in this case. Action
                                                     against this company may be treated as complete.
                                                     (iv) M/s Padmini Technologies Ltd.- The matter is under
                                                     investigation and is likely to be completed within a period of 6
                                                     months.
                                                     (v) M/s Ranbaxy Laboratories Ltd.-Investigations have been
                                                     completed and the final report submitted by the Investigating
                                                     Officer, proposing closure of the case, is under examination for
                                                     a final decision.
                                                                           30

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                         Further Progress
                                                     (vi) M/s Pentamedia Graphics Ltd.-Investigations have been
                                                     completed and a Show Cause Notice is being issued shortly.
                                                     (vii) M/s Zee Telefilm Ltd.- Adjudication proceedings are in
                                                     progress. The action against this company may be treated as
                                                     complete on the reasons mentioned against para No.12.121.
                                                     Action complete.
                                                     (viii) M/s Shonkh Technologies International Ltd.- The matter
                                                     originating from the material received from CBI concerning the
                                                     company is still under investigation and is likely to be completed
                                                     within a period of 6 months.
                                                     As reported in May, 2010
                                                     In the earlier progress reports action has been treated as
                                                     complete in respect of 18 companies out of 23 companies.
                                                     The position reported by Department of Revenue/Enforcement
                                                     Directorate in respect of remaining companies is as under:
                                                     (i)     M/s Satyam Computers Ltd.: Matter pertaining to
                                                             suspected contraventions of the provisions of FEMA is
                                                             under Investigations in the Hyderabad Zone of the
                                                             Directorate. From the investigations earlier conducted, it
                                                             was inter-alia disclosed that this company had failed to
                                                             realize proceeds worth over 148 Crore in respect of the
                                                             exports made, and as such a prima facie case of
                                                             contravention of the provisions of Section 7 & 8 of FEMA,
                                                             1999 r/w relevant regulations issued there-under was
                                                             made out. However, before any Show Cause Notice under
                                                             FEMA could be issued, during January, 2009 there came
                                                             up certain important developments, viz. a public disclosure
                                                             by Shri Rama Linga Raju, Chairman of this company, inter-
                                                             alia admitting acts of forgery/fudging of the company's
                                                             accounts / records. Hence, the Directorate registered a
                                                             case of commission of offences under PMLA, consequent
                                                             to registration of a criminal case by AP Police / CBI.
                                                             CBI investigations in the main criminal offence of forgery/
                                                             cheating etc. have revealed that as many as 7561 falls /
                                                                            31

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                           Further Progress
                                                             fictitious invoices. Three charge-sheets have since already
                                                             been filed by CBI against this company / its functionaries.
                                                             These developments do impact the aspect of outstanding
                                                             export proceeds. Since, a substantial portion of the
                                                             company's income was against exports, the veracity of
                                                             the exports is being examined to arrive at the correct
                                                             amount of export proceeds which are actually outstanding.
                                                             On completion of these investigations necessary Show
                                                             Cause Notice under FEMA would be issued.
                                                     (ii)     M/s Padmini Technologies Ltd. : This case is presently
                                                             under investigation by the Directorate under FEMA relating
                                                             to acquisition / disposal of the shares of this company by
                                                             certain Mauritius based OCBs. Necessary information /
                                                             details have been sought from RBI which are still awaited.
                                                             Also, the investigations are held up as this company is no
                                                             longer operating from its earlier known addresses, and
                                                             efforts are afoot to locate their present whereabouts.
                                                     (iii)    M/s Shonkh Technologies International Ltd. : This case
                                                             is also under investigation by the Directorate and it is
                                                             suspected that the shares of this company were acquired
                                                             by Ketan Parekh entities through Credit Suisse First
                                                             Boston India Securities Pvt. Ltd., besides disposal of their
                                                             shares in favour of certain other entities which were also
                                                             connected with Ketan Parekh. Probably, all these were
                                                             sham transactions. In this case too, the investigation is
                                                             held up for non -availability of the concerned parties, since
                                                             this company is no longer operating from its last known
                                                             addresses. Efforts are still continuing to locate the
                                                             concerned individuals and to bring this investigation to a
                                                             logical conclusion, at the earliest.
                                                     (iv)     M/s Ranbaxy Laboratories Ltd. : Investigation completed
                                                             and case closed as no FEMA violation noticed. In view
                                                             of the recommendations of DoR/ED, it is proposed that
                                                             action may be treated as complete.
                                                     (v)     M/s Pentamedia Graphics Ltd. : Show cause note issued
                                                             to the company and its CEO Shri V. Chandrasekharan
                                                                           32

Sl. No. Para No. Observation/Recommendation of JPC                Reply of Government/Action Taken                         Further Progress
                                                            on 19.11.2009 for non-realization of export proceeds
                                                            worth US $ 3,13,26,890 in contravention of Sec. 7(2) and
                                                            Section 8 of FEMA, 1999. Adjudication proceedings are
                                                            in progress. In the earlier progress reports a stand was
                                                            taken that with the filing of charge sheet(s), action on the
                                                            part of executive is over and action on a number of paras
                                                            was treated as complete. Since, adjudication proceedings
                                                            are quasi-judicial in nature and case will be decided/
                                                            adjudicated as per laid down procedures which takes a
                                                            number of years, there is no logic to keep these paras
                                                            pending for want of completion of adjudicating
                                                            proceedings. On the same analogy, it is proposed to treat
                                                            the action as complete.
                                                     As reported in December, 2010
                                                     In the earlier progress reports action has been treated as
                                                     complete in respect of 20 companies out of 23 companies. The
                                                     position reported by Department of Revenue/Enforcement
                                                     Directorate in respect of the remaining 3 companies is as under:
                                                     (i)      M/s Satyam Computer Ltd.
                                                     The proposed SCN was not issued in this case as the new
                                                     management of the company has filed restated accounts which
                                                     show variations in the actual export proceeds outstanding
                                                     compared to the figures furnished by the erstwhile management.
                                                     Hence the matter is being looked into afresh on the basis of
                                                     restated accounts submitted by the new management.
                                                     (ii)     M/s Padmini Technologies Ltd.
                                                     Investigation under progress. Dy. Director, Delhi Zone has been
                                                     advised to complete the investigations in a time bound manner.
                                                     (iii)    M/s Shonkh Technologies International Ltd.
                                                     Investigation under progress. Dy. Director, Delhi Zone has been
                                                     advised to complete the investigations in a time bound manner.
                                                     As reported in June, 2011
                                                     In the earlier progress report, action has been treated as
                                                     complete in respect of 20 companies out of 23 companies. In
                                                     respect of remaining 3 companies, ED have reported as under:-
                                                                              33

Sl. No. Para No. Observation/Recommendation of JPC                 Reply of Government/Action Taken                                 Further Progress
                                                     Sl.     Company               Present
                                                     No.                           Position

                                                     (i)    M/s Satyam            Show Cause
                                                            Computers Ltd. Notice for an amount
                                                                                  of Rs.50,64, 23,337/-
                                                                                  for non-realization of
                                                                                  export proceeds has
                                                                                  been issued on
                                                                                  28.4.2011-
                                                                                  Action complete.
                                                     (ii) M/s Padmini             Investigation is still
                                                            Technologies          under progress.
                                                            Ltd.
                                                     (iii) M/s Shonkh             Investigation
                                                            Technologies          completed and case
                                                            International         closed, as no FEMA
                                                            Ltd.                  violation noticed ­
                                                                                  Action complete.
                                                     In view of the above, it is proposed that the action in respect of
                                                     companies mentioned at Sr.No. (i) & (iii) may be treated as
                                                     complete.
                                                     As reported in December, 2011
                                                     In the June 2011 Progress report, action has been treated as
                                                     complete in respect of 22 Companies out of 23 companies and
                                                     i n r e s p e c t o f r e m a i n i n g c o m p a n y i . e . , M /s Padmini
                                                     Technologies Ltd. ED have reported as as under:-
                                                     "Investigations are in progress and efforts are being made to
                                                     finalise the same in a time bound manner."
 
 
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