Mumbai: The investigation wing of the income tax (I-T) department in Mumbai on Thursday searched the offices and residence of Anand Jain, chairman of Jai Corp. Ltd, and a close confidant of Reliance Industries Ltd’s chairman and managing director Mukesh Ambani.
Bombay Stock Exchange listed Jai Corp., set up by Jain in 1985, makes steel and plastics. It is also developing special economic zones (SEZs) jointly with Ambani.
In trouble? Jai Corp. chief and Mukesh Ambani confidant Anand Jain. Abhijit Bhatlekar / Mint
E.T. Lukose, director, income tax investigation, in Mumbai, confirmed the development, but declined comment on the reasons for the search. “We are aware of the reasons, but not allowed to speak to media on this,” he said.
Another senior officer of the I-T department, who did not want to be identified, said, “The raid began in the morning.” At around 5.45pm on Thursday, when Mint spoke to a senior Jai Corp. official, the search was still on.
The I-T search was conducted simultaneously at Jain’s residence at Sterling Apartments and Jai Corp.’s corporate office at Embassy Centre, Nariman Point, as well as its office at the Navi Mumbai SEZ.
A senior Jai Corp. official, who was present at one of the premises searched and did not want to be identified, said: “I-T officials had come to both the office and residence (of Anand Jain) for some cross verifications.” He declined comment on the reasons for the search and directed all queries to the I-T department.
Dilip Chaware, a spokesperson for Jai Corp.’s SEZ ventures, Navi Mumbai SEZ Pvt. Ltd and Mumbai SEZ Ltd, was not available for comment.
A person familiar with the development, who asked not to be identified, said Jain is being investigated by the I-T department for alleged kickbacks and other irregularities in real estate transactions through his two venture capital funds. However, this could not be confirmed as neither the I-T department nor Jai Corp. officials were willing to comment on the issue.
In June 2006, Jai Corp. set up Urban Infrastructure Opportunities Fund and followed it up with another fund in May 2007, Urban Infrastructure Real Estate Fund. Going by Jai Corp.’s 2007-08 annual report, these two funds together have a corpus of Rs5,708 crore.
Jai Corp.’s wholly owned subsidiary Urban Infrastructure Venture Capital Ltd manages the Urban Infrastructure Opportunities Fund and advises the Urban Infrastructure Real Estate Fund.
Jai Corp. also plans to develop township projects at Nashik in Maharashtra.
Shares of Jai Corp. fell 4.94% to close at Rs74.15 each on the Bombay Stock Exchange on Thursday even as the exchange’s 30-stock benchmark index, the Sensex, lost 2.94%.
Jai Corp.’s net profit has jumped from Rs7 crore in 2006 on revenue of Rs205 crore to Rs128.15 crore in 2008 on revenue of Rs461 crore.
Jain does not hold any official position in Reliance Industries, India’s largest company by value, but is a troubleshooter for the group.