The State government on Tuesday told the High Court of Karnataka that sanction has been granted to the Central Bureau of Investigation (CBI) to probe the criminal cases registered against I Monetary Advisory (IMA) and all its entities.
Following this submission, a Division Bench comprising Chief Justice Abhay Shreeniwas Oka and Justice Mohammad Nawaz directed the CBI to submit a status report of the investigation by September 12.
The Bench allowed the SIT to continue the investigation and take necessary steps till the CBI took over the probe as Advocate-General Prabhuling K. Navadi informed the Bench that the State government would soon send a communication to the Union government to pass necessary orders for the CBI to take over the probe and sought permission the Special Investigation Team (SIT) to submit preliminary investigation reports before the jurisdictional court in the event of delay in CBI taking over the probe due to procedural aspects.
The government submitted a copy of the notification issued on August 19 granting sanction under Section 5 and 6 of the Delhi Special Police Establishment Act, 1946, to enable the CBI to probe IMA cases.
Also, the Bench said that both the CBI and the Competent Authority (CA) appointed under the Karnataka Protection of Interest of Depositors (KPID) in Financial Establishments (KIPD) Act, 2004, had to consider the allegation made on behalf of the petitioner-investors of IMA group that the company had operated its bank accounts from foreign countries and shifted some accounts to different banks.
As the officers holding the post of CA for IMA case under the KPID Act have been changed thrice for various reasons, the Bench observed that it was necessary to post an independent officer to the post of CA for IMA cases while giving two days to the government to appoint a CA.
The Bench also said that a minimum background check of the officers was necessary before appointing them as CA as the Chief Secretary in his report, on process of appointing a CA, submitted to the court had stated that there was no practice of checking background of the officer when appointing them to the post of CA.
While adjourning further hearing on PIL petitions seeking a probe by the CBI and steps to protect interests of investors of IMA group of companies till August 28, the Bench directed the competent authority to submit status report on action initiated as per the KPID Act.
