The Economic Offences Wing (EOW) of the Mumbai Police on Monday registered an FIR against two owners of the Cable Corporation of India (CCI), a leading manufacturer of a wide range of power and control cables, for allegedly duping another cable and wire supply company of Rs 14.23 crore.
Owners of CCI Hiten Khatau and Rohan Khatau, along with the company’s office-bearers, were booked under sections 420 (cheating), 406 (criminal breach of trust) and 120B (criminal conspiracy) of the Indian Penal Code.
The FIR followed a complaint by the chairman and managing director of an Andheri-based company, which is into the business of supplying cable and wires for prominent cable work operators and contractors.
In 2022, the complainant learned that CCI, a leading manufacturer of a wide range of power and control cables, had suffered a huge loss in business, due to which their plant in Malegaon MIDC was shut down. The complainant decided to buy the said company, police said.
After meetings with CCI owners, the complainant decided to buy the company’s cable and wire section. A memorandum of understanding (MoU) was signed, and later, a framework agreement was also signed between the two parties, the FIR said.
Since CCI was unable to complete their old and delayed orders, they sought help from the complainant company, urging them to supply them with cables and wires so that they could sell off the company to them without any liabilities, police said.
The accused also told the complainant that they were going to earn Rs 39 crore by completing the old and delayed orders; hence, they would be in a better position to pay the complainant company.
After the accused company issued purchase orders, the complainant supplied cables and wires to them between February and June 2022, the complaint said. This deal was outside the framework agreement signed between the two companies. The CCI purchased cables and wires worth Rs 14.23 crore from the complainant, but did not make payment for the same, the complainant alleged in the FIR.
Later, the complainant company discovered that the CCI earned good income from old and delayed orders and diverted funds from the company’s bank account.
Despite earning profit, the CCI allegedly failed to pay them and caused wrongful loss to them, the FIR added.
On the complainant company’s complaint, the EOW on Monday registered a case at the MIDC police station and took over the investigation, said an officer. The EOW officials are checking the veracity of the allegations made by the complainant company against the accused company and its owners.