Four companies belonging to one of Maharashtra’s largest
educational groups, DY Patil, are in the dock for accepting illegal
capitation fees, falsification of books of accounts and “not presenting a
true picture of their financials”.
The Ministry of Corporate
Affairs Western Regional Director’s office has started an inspection of
the
books of DYP Hospitality, DY Patil Educorp, DYP Wellness and SHP
Properties, according to sources.
“The Western Regional Director
Office has already completed the first round of inspection into these
companies recently,” a source said.
Another source explained the
alleged wrongdoing: “The DY Patil Group has four deemed universities and
two international schools. Some of the institutions took capitation
fees in cash. This money does not reflect in the books of account."
The
MCA also found instances of falsification of books of accounts and
misrepresentation of the true picture of their financials.
Capitation
fee refers to an illegal transaction in which an educational
institution collects a fee that is more than is allowed, typically in
cash. In 2016, the Supreme Court termed charging capitation fee as
illegal.
An inspection is the second course of action by
authorities such as MCA in cases of alleged financial wrongdoing and
takes place after a preliminary enquiry. The third step is ordering
further investigation, which is yet to take place in case of DY Patil.
"All
directors, including the family members of these companies and
employees related to the admission process and the middlemen are also
under the MCA’s scanner," a source said.
The Income Tax Department
also shared details of the companies in a common meeting that is
routinely held between investigation agencies and regulators.
The
I-T department conducted searches at DY Patil in 2016 in which the
department found around Rs 30-40 crore in cash and around Rs 700 to Rs
800 crore of unaccounted money on the books.
Moneycontrol reached
out a director of one of the companies on phone on October 24. The
director, who spoke on the condition of anonymity, termed the MCA’s
action as “routine”. He further said that DY Patil was not the only
educational institute under the MCA’s scanner.
An email to the DY Patil Group seeking comment went unanswered at the time of writing.
The
inspection by the Western Regional Director Office has also identified
beneficiaries of such deals – parents and students who paid capitation
fees and obtained admission in these institutes.