A Kolkata court passed an order against UpHealth Inc, UpHealth Holdings Inc and its officials including Dr Avi S Katz, Raluca Dinu, Martin Samuel Arthur Beck, Ramesh Balakrishnan, Ranjini Ramakrishna and Ajay Arora threatening attachment and arrest for offences of Criminal Breach of Trust, Cheating and Commission of Criminal Conspiracy. The order was in cognizance of a chargesheet, filed by West Bengal CID’s Anti Cheating & Fraud Section against UpHealth and its officials.
The Chief Judicial Magistrate, Barasat, North 24 Parganas on 29/05/2024, held that "the chargesheet discloses the commission of serious offences by the Accused persons" and that “the accused are stated to be absconding and a warrant of arrest is required to be issued against them”. The court found that prima facie ingredients of the offence punishable under section 406/ 420/ 423/ 426/ 427/ 120B/ 34 of the IPC are traceable against the accused and there remains ample scope to proceed against them in accordance with the law.
The matter stems from an FIR registered by Glocal Healthcare Systems Pvt Ltd before the Technocity Police Station in West Bengal alleging commission of criminal offences by the UpHealth consortium in relation to a Share Purchase Agreement executed between UpHealth & Glocal Healthcare Systems in the year 2020.
Glocal Healthcare Systems Pvt Ltd (Glocal) was incorporated in 2010 by Dr Syed Sabahat Azim (an ex-IAS Officer and globally recognized social entrepreneur) and his wife Richa Sana Azim to make healthcare delivery accessible, affordable & accountable across underserved India. Glocal entered into an oral agreement and then a Share Purchase Agreement (SPA) to raise funds on 30 October, 2020 with UpHealth Holdings Inc., a wholly owned subsidiary of Gig Capital 2, a Special Purpose Acquisition Company (SPAC) in the USA. The terms were seemingly promising: exit to existing investors, shares in a NYSE listed entity for Glocal shareholders, debt repayment, working capital and capital to fuel Glocal's growth plan, paving the way for expanded healthcare services. Gig Capital 2 was renamed UpHealth Inc., which combined with 5 other entities and started trading on NYSE in June 2021.
However, what ensued was nothing short of a betrayal. It has come to light that Gig Capital 2 / UpHealth, did not have resources to fulfil their commitment and made false representations to induce Glocal shareholders for the deal. Only a fraction of the promised investment came in the form of actual money. Majority of the investment was in the form of worthless shares. Significant amount was spent in transaction expenses and paying UpHealth officials lavish and undeserved salaries. UpHealth engaged in deliberate destruction of value and data theft at Glocal. The transaction severely undermined Glocal's prospects and causing immense harm to its shareholders.
UpHealth started an ICC arbitration in which Glocal did not participate on the grounds that these are not matters of arbitration but of ab initio fraud at inception and a matter of Indian Company Law. Subsequent to the various litigations, Glocal filed an FIR No. 105/2023, at the Technocity Police Station in West Bengal alleging commission of criminal offences by the UpHealth consortium in relation to the SPA. UpHealth officials also unsuccessfully tried to take control of Glocal Board to cancel cases against them.
The police in its status report filed in Barasat Additional Criminal Magistrate stated that the evidence bears out the allegations. After findings made by the Commercial Court, Glocal took legal opinions and terminated the said SPA after giving notice to UpHealth and cancelled all shares issued to UpHealth Holdings except for 16.56% in proportion to the money actually paid by them, despite the SPA being terminated.
The final chargesheet by CID places reliance on forensic evidence and concludes that "there is reason to believe that the above-noted accused persons, by giving false assurances regarding their financial capabilities, intentionally deceived the complainant into believing that they have sufficient funds amounting to USD 507 million to invest in the Complainant's company. This deception dishonestly induces the complainant to enter into a contract with the accused companies. It is believed that the accused persons, by making false representations and statements, misled the International Court of Arbitration of the ICC into issuing an ex-parte final award against the complainant's company, causing USD 110.2 million in damages to the complainant's company and it has also caused injury to the reputation of the complainant's company."
“Accordingly, a prima facie charge u/s section 406/ 420/ 423/ 426/ 427/ 120B/ 34 IPC has been well established against the above noted accused persons.”
It has come to light that there are several other entities with whom a similar fraud has been perpetrated by the delinquents in the United States.
No comments:
Post a Comment