Mother Dairy below MCA lens, ‘inquiry’ into books ordered

THE GOVERNMENT has ordered an inquiry into the books of Mother Dairy Fruit and Vegetable Private Ltd (MDFVL), a wholly-owned subsidiary of the National Dairy Development Board.
Responding to a query within the Rajya Sabha, Minister of State for Finance and Corporate Affairs Anurag Thakur stated, “An inquiry under Section 206 of the Companies Act, 2013 was ordered.” Section 206 of the Companies Act provides the Registrar of Companies the facility to name for info, examine books and conduct inquiry with respect to any firm. Thakur was responding to a query by Manoj Jha on losses of MDFVL within the Rajya Sabha on February 9.
MDFVL had reported losses amounting to Rs 142 crore within the yr ended March 31, 2019. It reported lack of Rs 249 crore within the yr ended March 31, 2020.

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Though the standing of the inquiry isn’t identified, sources say it could possibly be in relation to a criticism by a person alleging fraud amounting to about Rs 1,000 crore on the firm or linked to investments of Rs 190 crore by MDFVL in IL&FS in August 2018.
In May 2019, The Indian Express had reported that having acquired a criticism, alleging a number of situations of fraud amounting to Rs 1,000 crore at MDFVL and searching for a Serious Fraud Investigation Office probe, the Department of Economic Affairs had directed the identical to the Secretary, Ministry of Corporate Affairs for “necessary action”. The DEA additionally directed the criticism to the Secretary, Ministry of Agriculture.

Besides this, the corporate has suffered loss on account of investments in IL&FS in 2018-19.
In the notes to account for FY19, it’s talked about, inter-alia, that “as a result of increased credit risk in relation to outstanding balances from IL&FS and the uncertainty prevailing due to proceedings pending with NCLT, the management has provided for full amount of Rs190.85 crore year ended 31st March, 2019. The same has been disclosed as an exceptional item in results. The company, however, continues to monitor the developments in this matter closely as more information/outcome to the resolution plan of IL&FS becomes available and is committed to take appropriate legal action that may be necessary to ensure full recoverability”.