New Delhi, Nov. 19 -- Arpit Khandelwal, managing partner and co-founder of Plutus Wealth Management, is facing allegations of fraud in a police complaint filed by a former promoter of Provogue (India) Ltd.
Police in Amboli, near Mumbai, have registered a First Information Report (FIR) against Khandelwal and three others following a complaint which alleges that Provogue was cheated of Rs 90 crore through their actions.
The three others are Sameer Khandelwal, a former employee of Provogue; Rakesh Rawat, a former director of Provogue subsidiary Elite Team Hong Kong; and insolvency resolution professional Amit Gupta.
VCCircle has reviewed a copy of the complaint.
The complaint has been filed against Khandelwal in his capacity as the director of group company Plutus Investments and Holding Pvt Ltd, which had acquired Provogue in 2023. According to VCCEdge, the acquisition was made for around Rs 100 crore ($12.19 million then).
According to the complaint, Khandelwal and others conspired to undervalue Elite Team Hong Kong, which was a Hong Kong-based 100% subsidiary of Provogue.
The subsidiary owned two immovable properties in Hong Kong that were valued at Rs 54.72 crore in FY18 but it was undervalued during the liquidation process, when the properties were categorised as "Other Assets". In the auction notice issued by the liquidator, all assets under "Other Assets" were valued at a reserve price of Rs 3.16 crore.
The other two assets in the notice were commercial office premises in Andheri West, which had a reserve price of Rs 27.85 crore, and the Provogue brand, which had a reserve price of Rs 35 crore. Provogue, as a going concern, had a reserve price of around Rs 66 crore.
The complaint alleges that the subsidiary was undervalued in the e-auction with the help of Gupta, who had been appointed as the resolution professional and liquidator after the National Company Law Tribunal ordered the liquidation of Provogue in 2019, and two others.
Provogue went into liquidation after it could not pay its dues to the Union Bank of India, following a factory fire in Daman, and its loan account turned into a non-performing asset (NPA).
VCCircle has written to Plutus Wealth and Plutus Investments and Holdings, and to the resolution professional seeking comment, and the article will be updated once their responses come in.
The complainant has also alleged suspicious export transactions by Provogue between FY19 and FY23, when the company was under the supervision of the resolution professional Gupta.
According to the complaint, Gupta exported goods to a new client without receiving payments. The complaint alleges that receivables between FY19 and FY23 added up to Rs 32.71 crore in this period.
In November 2024, the Insolvency and Bankruptcy Board of India (IBBI) had cancelled Gupta's registration as an insolvency resolution professional after having found him to have exacted "undue fee" from the liquidation proceedings of several companies including Provogue. According to the IBBI order, he had received excess fees to the tune of Rs 1.74 crore for Provogue. In all, he was found to have charged excess fees of Rs 5.46 crore.
Published by HT Digital Content Services with permission from VC Circle.