The Economic Offences Wing (EOW) of India has thrown out a criminal complaint filed by HSBC against Avitel Post Studioz Ltd, which has sister companies in Dubai and Mauritius. After detailed investigation that lasted over three months, the EOW concluded that the allegations raised by HSBC against the company were false.
The case was closed after the investigation team found no evidence to substantiate any allegation of forgery and fund diversion against the company. The EOW closure report categorically stated that Avitel had utilized the proceeds for purchase of machinery and business purposes to cater international expansion. It further clarifies that there was no siphoning of money as alleged by HSBC.
The case relates to an investment of $60 million made by HSBC Principal Investment, the private equity arm of the HSBC Group, for a minority equity interest in Avitel Post Studioz in 2011. HSBC alleged that Mumbai-based Avitel Post-Studioz Ltd, with its sister companies in Dubai and Mauritius respectively, made a false representation that it had won a contract from the BBC (British Broadcasting Corporation) to upgrade the broadcaster’s library from 2D to 3D format.
