Denied control of business by her influential in-laws after her husband died, a South Delhi woman seeks to assert herself as rightful owner of the business and assets that her husband has left behind.
In an ugly turn of events, a South Delhi widow belonging to a prominent business family has alleged that her in-laws fraudulently took control of the business that her late husband had single-handedly built with his own ‘grit and sweat.’
According to Sadhana Mehrotra, her in-laws first threw them out of their house when her husband was still alive, forcing them to live out of a rented accommodation, and now after the death of her husband, the they have disowned her and her minor daughter by ‘usurping’ her husband’s multi-million business empire, VLS Group.
Until 22 August, 2015 Sadhana was happily living with her husband Somesh Mehrotra and her daughter Daya. A homely housewife, she was not involved by her husband in matters of his business. With an experience of 20 years in financial investment services and other sectors, Somesh had earned himself a name as he expanded his business while heading VLS Finance Ltd., VLS Securities Ltd., South Asian Enterprises Ltd and other subsidiaries of his VLS Group.
However, Sadhana’s whole world came crashing down with the sudden death of her husband that day, so did her fortune with that single stroke of fate. A
Speaking to Janta Ka Reporter, Sadhana alleged that as soon as her husband Somesh died, her brother-in-law Vikas and father in-law Mahesh Prasad moved swiftly to take control of the business that her husband had built over the past two decades.
She said, “This started a systematic harassment by my brother-in-law Vikas and my father-in-law.”
Filed with the Assistant Commissioner of Police, Lajpat Nagar, the complaint says that both father–son duo tried to pressurise her to agree to whatever they would offer her in money to compensate her for forgoing her claim over her husband’s business and estate that he had created.
Sadhana says, “On 14 September, 2015, when their visits failed to bring me on board, my father-in-law invited me to a meeting at Hotel Hyatt, on Ring Road, New Delhi, instead of the house at Defence Colony which my late husband and I shared with the rest of the family before we were forced to move out into a rented accommodation. This was after the relations between Somesh and his father soured because of undue pressure my father-in-law was putting on my husband.
“During the meeting, my father-in-law asked my daughter Daya to go out and play with a mobile phone even though she has been very close to her grandfather. I asked him to appoint me as a director in the company and allow me to attend office. I even told him that my intention was only to assist him to fulfill my husband’s unfinished ambition with the company. Astonishingly, he refused to oblige and instead told me that I could attend office but would not be allowed to touch or disturb anything there.”
On 18 September, 2015, Sadhana says she learned from her sources that Mehrotra Sr. had not only managed to become a member on the board of directors but had also brought both the board and the staff under his control. This prompted her to visit her husband’s office at Sant Nagar, East of Kailash, along with an old staff member and the VLS Business Head Virendra Bisht. She was stopped from entering the office premises allegedly by the newly appointed bouncers who also abused and manhandled her.
In her police complaint, Sadhana alleges that this had taken place at the behest of Vikas and Mehrotra Sr.
“This happened in full view of the staff present there. Bisht dialled police helpline 100 to seek their help. An FIR was registered against the guards a day later,” she says.
In her reply and counter-claim to a complaint that Vikas and sister-in-law Divya Mehrotra have filed with the Delhi High Court, Sadhana claimed that Vikas and Divya was party to the larger conspiracy of usurping Somesh’s business in which complicit were their father Mehrotra Sr., his associate Rajesh Jhalani and other confidants of the family.
VLS Group and how Sadhana’s world came crumbling
Incorporated in 1986, VLS Finance Ltd., the flagship company, is a name to reckon with in financial sector with a net worth of Rs. 180 crore with no debt. Listed on Bombay Stock Exchange, VLS Finance deals in investment banking, structured finance, corporate consulting and advisory services, stock brokering, privatisation and infrastructure finance, proprietary investments and equity research.
Sadhana’s late husband Somesh, his brother Vikas, sister Divya, father Mahesh Prasad and mother Sushma held 2.29, 1.26, 2.69, 1.52 and 1.22 pecent shares each in VLS Finance, in which VLS Capital holds 38.08 per cent shares. Somesh held a controlling stake of 52.06 percent VLS Capital wat the time of his death.
Somesh’s majority stake in VLS Capital was made possible after Mehrotra Sr. transferred 24.26 percent shares, out of the 25.95 percent shares that he held in VLS Capital, to Somesh on 6 February, 2006. The same day another transfer of shares was effected in favour of Somesh, as Vikas sold his 14.91 percent stake to his elder sibling. By virtue of these transfers, Somesh had a controlling stake in another group company, South Asian Enterprises Ltd, by way of VLS Capital holding 59.61 percent stake in the subsidiary. Prior to these transfers, Somesh owned only 12.88 percent stake in VLS Capital.
It is these transfers of shares that both Vikas and Divya have challenged in the high court, terming these transfers to have been effected without their knowledge and making their father Mahesh Prasad a defendant in the complaint.
As Sadhana’s reply-cum-counter-claim states, Vikas resigned from the directorship of both the South Asian Enterprises and Gold Stone Technology Ltd., another sister concern, after the said share transfer to Somesh to settle in the United States where he is now a ‘naturalised citizen’.
An MBA from Rochester Institute of Technology, Vikas himself is a ‘specialist in finance and investment management’ who has ‘worked as wealth manager’ for companies like UBS and Paine Webber Inc. He went on to establish his own company, Venus Capital Management Inc., in 1994.
Sadhana says, “Vikas had lost interest in living in India, and was more inclined to live and operate from USA. Somesh helped him with money to give him an asset base there.”
Refuting the claim of Vikas and Divya that the share transfers were carried out without their knowledge and they came to know about it only in October 2015, Sadhana claims that all records of these transfers along with other important records of the VLS Group companies were lying till recently at her Defence Colony residence at C-651, which was also workplace of hers, her father-in-law Mehrotra Sr. and Somesh till he died on 22 August, 2015.
According to Sadhana’s reply in High Court, although Somesh had moved out to a rented accommodation in the same colony with Sadhana and their minor daughter, Divya, a year before his death, he used to keep all essential records of his business and cash in the old house. Sadhana maintains that it is unlikely that Vikas and Divya had no knowledge of these share transfers while staying in the same house as their father Mahesh Prasad, who himself is a qualified practicing chartered accountant.
It is highly likely that all these records that Somesh had kept in that house have been destroyed or removed, claims Sadhana.
She says that prior to the share transfers in 2006, every share holder would get annual reports and notices which reflected the share-holding pattern of VLS Group companies.
“Till then Somesh’s holding reflected his original stake at 12.88 percent in VLS Capital. The same has been reflected in company balance sheets and ITR and RoC filings too. After the share transfers in 2006, all such statutory returns and filings reflect Somesh’s stake holding at 52.06 percent in VLS Capital, which is the holding company of VLS Finance and other subsidiaries. All these documents can be accessed from anywhere in the world via the internet. In addition, all board meetings and AGMs used to take place at the plaintiff’s Defence Colony residence at C-651, which makes it clear that no decision or act can go unnoticed from anybody.”
Bringing into question her brother-in-law’s conduct in particular, Sadhana’s reply-cum-counter-claim says that “Vikas is a naturalized US citizen. He has been filing his Income Tax Returns from 2005 onwards in India and in USA also. He was assess to Income Tax both in India being a PIO/OCI (PAN NOACQPM4418C) and in US under their IRS (Internal Revenue Service). Failure to file copies of his US-IRS returns before this Hon’ble Court is conclusive of Vikas’s claim being false to his knowledge.”
Somesh’s widow has also brought to the court’s notice what she claims is the not-so-above-board conduct of her brother-in-law.
In her reply, Sadhana claims that on 14 August, 2008 SEBI had directed “Vikas to pay Rs. 2.36 crore for involvement in fraudulent, unfair trade practices, price manipulation of Nissan Copper stock from Rs. 40 to Rs. 135.70 in one day. There is also judgment of a US court (30.11.2011) which sanctions Vikas for having unlawfully destroyed records.”
Then around 2006, Sadhana goes on to claim in her reply, Vikas’s firm Venus Capital Management “had received Rs. 1.5 crore” from VLS Capital. Barely two months after Somesh died, Divya and her company VLS Commodities were allotted 4 lakh and 6.50 lakh equity shares, respectively, while around September 2015, Mehrotra Sr. had transferred Rs. 4.5 crore to Divya, who in turn invested the same with Vikas’ firm.
While defending her case thus, Sadhana has not only claimed her and her minor daughter’s right over all shares and assets that belonged to her late husband Somesh as his natural and legal heirs but also sought partitioning, in hers and her daughter’s favour, of the Defence Colony house and all the shares of VLS Capital that Somesh’s mother had possessed who died a year before his death.
While the tug of war between the Mehrotras and their daughter-in-law is symptomatic of the greed and deceit of such high-profile families, it will take a long while before Sadhana would be able to seek justice for herself and her daughter through judicial intervention.
Janta Ka Reporter contacted Mahesh Mehrotra for his comments, but he said he did not have anything to say as the matter was sub-judice.
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