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.
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.
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