[GTO]

Jagdish Khattar releases the following statement:

Please find below statement of Jagdish Khattar for reference.

“Carnation Auto was a first mover to create an open multi-brand auto solutions platform for customers whose cars were outside warranty period and who felt pinched by high maintenance costs. It unfortunately became a bonafide business failure on account of many reasons including cartelization by auto majors by non-supply of genuine parts.

Carnation was a board managed company with the highest ethical standards and best management practices. Some of the most reputed investors in the country including Premji Invest and Gaja Capital were board members who, in their own interest, kept a tight vigil on its operations and finances. Each financial decision was based on comprehensive business plans and approvals. The company was finally sold to Mahindra Group. Post its failure as a business, an exhaustive and detailed independent forensic audit at the behest of the bankers under the resolution professional was conducted by a leading independent auditor and nothing was found amiss. Having found no lapses in operations or financial management the Bank has referred the matter to CBI as a part of the process followed by them. The company has not indulged in any wrongdoing. A search was conducted by CBI but nothing incriminating was found.

“I had invested my life savings in the company. I understand the bank is following a process. I have always made myself available and will continue to fully cooperate with all the agencies. The claims being made were examined in great detail during the forensic audit and we provided satisfactory replies on each. We were cleared in the forensic audit on each count. I have no doubt we will be vindicated again once the investigation is completed.”

[bigron]

Without commenting on the facts of the case since I have yet to read the CBI Fir, but from reading the charges its a pretty standard economic offence narrative.

A simple paper trail shows intent that proves such cases.

The problem is, even when there is a legitimate fall of a business as all business are prone to failure without any connivance from the promoter , the law finds it very hard to accept such contention and the element of 420 IPC always creeps in.

He is probably looking at immidiate bail. Also, the fact that he was a man of integrity etc etc holds little value and my experience tells me that any man is capable of committing an act he was not expected to commit.

He should have a document to prove every word of defence he takes.

[gautam109]

Hypothecation is typically for running stock (parts, oil, other consumables) and bank's approval not really needed to sell. Funny they would claims so. The sale proceeds have to come into a designated account though, and can be withdrawn from there for fresh purchases. If Carnation diverted those funds, bank has valid case.

Fixed Assets pledged to banks absolutely cannot be sold without bank approval. So if that happened it's clearly wrong.

Businesses do go bust and no one should be punished for that. But one would expect a person with Mr Khattar's background to exercise greater control and caution on such compliances.

[altius]

Only a few days back, PM has said that genuine business failures will not be criminalised, but looks like it will take a long time to people down the line to get the message and act accordingly. Even the media has already dubbed it a "Bank Fraud" case. It seems in the current climate, one is deemed guilty till he proven innocent. Hope a fair investigation is conducted.

https://www.livemint.com/news/india/...830149742.html

[neil.jericho]

Firstpost provides more details.

The CBI has alleged that Khattar and his company dishonestly and fraudulently sold the goods hypothecated to the bank without its permission and diverted the funds thereby causing a criminal breach of trust and cheating that caused wrongful loss to the bank and gain to Khattar and his company.

The bank had conducted a forensic audit which showed that fixed assets to the tune of Rs 66.92 crore were sold for a consideration amount of Rs 4.55 crore without its approval, they said.

It is also alleged that sale proceeds were not deposited with the bank and Khattar had dishonestly and fraudulently extended loans and advances to its sister concern/subsidiaries also.

"Thereby it has committed mis-appropriation of bank funds and has put them for own use," the FIR said.

The bank officials allegedly did not do mandatory monthly verification of stock and cross-check the debtors/creditors, the FIR said adding the role of bank officials will be under scanner.

The idea behind Carnation was sound but it's execution was terrible. I remember visiting a Carnation store in Bangalore several years ago and that was the last time I went there. This TBHP thread probably didnt help either - link. (Poor experience at Carnation, Bangalore)


Many years ago, a friend of mine, who is a relative of Jagadish Khattar and personally very well known to him, wanted to buy her first car. All of us were buying our first cars around the same time, but with the safety net of Jagadish Khattar, my friend decided to go the pre-owned route through Carnation and strings were pulled. It was a pre-owned Hyundai and I have driven that car. Safe to say it was a lemon.

[fazayal]

Heard that Jagdish Khattar is no more. Nothing in media as of now.

[BoneCollector]

Originally Posted by fazayal

Heard that Jagdish Khattar is no more. Nothing in media as of now.

Yes. He passed away due to cardiac arrest today.

[moralfibre]

Originally Posted by fazayal

Heard that Jagdish Khattar is no more. Nothing in media as of now.

It is confirmed news: