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The Hindu
The Hindu
National
The Hindu Bureau

CB-CID to probe charges of extortion in boardroom dispute of private firm

The Crime Branch CID (CB-CID) will investigate an allegation that officers of the Greater Chennai Police’s Central Crime Branch (CCB) coerced the managing director (MD) of a firm to pay ₹50 crore to a shareholder removed from its board. The agency will take it up as the probe has been ordered by the Madras High Court, sources in the CB-CID said.

Balasubramaniam Sriram, a director in Ocean Lifespaces India, a Chennai-based company engaged in interior design, general contracting, and property development, was removed from its board. Mr. Sriram challenged his removal before the National Company Law Tribunal (NCLT).

The CCB also filed an first information report (FIR) on August 14, 2023 on Mr. Sriram’s complaint that he was cheated by the company’s promoters.

Its directors, including Syvanus King Peter, MD, approached the Madras High Court for quashing the FIR. Passing orders on the petition on December 15, Justice G. Jayachandran noted that the CCB inspector’s report said Mr. Sriram had submitted a letter that well-wishers of Ocean Lifespaces had intervened to bring about a compromise, under which there was an agreement to settle the matter for ₹50 crore, and that ₹34 crore had been paid up to October 9 last.

However, a counsel for Ocean Lifespaces submitted that the payment was made to the complainant under threat and coercion by the investigation officer.

‘Murky and suspicious’

Declining to quash the FIR filed by the CCB, Justice Jayachandran said: “This court finds that it is a matter of very serious nature and to be probed by a specialised agency. While the de facto complainant [Sriram] had approached the NCLT seeking remedy of relinquishing the minority share of 10% for a value of ₹13 crore, the payment of ₹50 crore by the petitioner to buy the shares per se appears to be murky and suspicious.”

The court has directed the investigation to be transferred from the CCB to the CB-CID by an officer not below the rank of the Superintendent of Police. Meanwhile, senior police officers of the Greater Chennai Police denied allegations of any threat or coercion by CCB personnel.

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