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Millennium Post

Is Indiabulls Group bullying whistleblower?

Now India has done a China and earned the dubious distinction of becoming probably the first democratic country to arrest an independent research analyst Nitin Mangal, who was co-author of a report titled ‘Bilking India’ prepared by Veritas Investment Research Corporation, Canada.

The report was put online by Bloomberg on August 8, 2012, and it highlighted the issues of corporate governance, transparency and raised sharp questions regarding the working of Indiabulls Real Estate Limited, Indiabulls Power and Indiabulls Financial Services Limited. The news of the report resulted in fall in shares of these companies, while Mangal was sent to police custody till 1 December.

As soon as the report was out, Indiabulls Group responded by coming up with a theory of extortion and filed a case against Veritas, Neeraj Monga and Nitin Mangal under various provisions of the Indian Penal Code including extortion, criminal intimidation and fraud among others, as well as under the Information and Technology Act. Not satisfied with this, Indiabulls Group filed another FIR with regard to the same report with the Mumbai police the next day on August 9. Three email exchanges between Canada-based Monga and London-based Prashant Periwal were cited as proof
of extortion calls.

In both these criminal cases involving multiple jurisdictions, the allegation against Nitin Mangal was only that he was co-author of the report. What is baffling is that without any additional evidence, the Gurgaon police, where the Indiabulls Group is based, added charges of forgery of documents also after a few days of the registration of the FIR.

In the meantime, Mangal approached the Bombay High Court for anticipatory bail. The hearings continued from December, 2012 to March, 2013. During this period, Mangal was granted interim protection against arrest and was interrogated by the crime branch for over 22 days during which his laptops, pen drives were seized. The Bombay High Court granted him anticipatory bail by observing, “It is spelt out from contents of the complaint that it is an attempt of extortion. The act of extortion was not complete and no payment whatsoever was made.”

The High Court of Bombay in its order dated March 25, 2013, further observed, ‘Insofar as the question of falsehood is concerned, a limited company which has to depend on investment by shareholders in the shares of the company, has always to remain in public gaze and the criticism is always liable to be answered for maintaining transparency. Though present is not the stage where it may be possible including this court to be persuaded to believe that report sought to be published, and actually published on the internet was false, and due to said falsehood offence under section
66-A is committed.’

Veritas and Neeraj Monga filed a multimillion-dollar suit against Indiabulls Group companies in Canada in 2014. What is interesting is that a criminal complaint is also being investigated against Indiabulls Group by the Royal Canadian Mounted Police (RCMP), which has high reputation globally. The RCMP has so far sought no cooperation from the Gurgaon police in the matter.

As soon as notice of the multimillio- dollar case was received, Indiabulls moved Delhi High Court and filed two civil suits of anti-injunction in which interim relief was granted to Indiabulls Group by the court.

Nitin Mangal, who was made party to these suits, appeared through his lawyers in Delhi High Court on November 13 this year. Suddenly, the Gurgaon police swung into action for Mangal’s arrest and he preferred to surrender before the magistrate court at Gurgaon this Tuesday and has been sent to police custody as the police claimed that certain recoveries are to be made.

Mangal’s lawyer Amit Dube, who also represented him in Bombay High Court, said, ‘It is not clear as to what recovery the police aim for as all equipment have already been seized by Mumbai police crime branch and also reported to the Bombay High Court.’ Dube also said that the email exchanges between Monga and Periwal were mere subscription queries and Mangal is in no way responsible. He maintains that all the charges against Mangal are false and it is quite unfortunate that the police instead of completing its investigation in the last 28 months have now arrested him.

Whatever be the outcome of Mangal’s incarceration, one thing is clear that in our democracy which champions the cause of freedom of expression the rare breed of independent analysts are being forced to live under constant fear. The reason is that cases are registered without verifying the veracity of the complaints. The silence of the Securities Exchange Board of India, the BSE, the NSE, the Ministry of Corporate Affairs and the Ministry of Finance is all the more deafening as these authorities have refused to investigate the veracity of the report despite requests from Monga.

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