Gujarat HC rejects plea to quash FIR against Surat’s Vasant Gajera in ₹1,928 cr fraud case

Gujarat High Court has declined to quash a First Information Report (FIR) registered against prominent Surat-based businessman Vasant Gajera at the Surat Crime Branch, citing prima facie merit in allegations of siphoning off ₹1,928 crore from a real estate company through forgery, share dilution, and fraudulent fund routing.

The FIR, lodged earlier this year following a directive from the high court itself on a complaint by businessman Pravin Agrawal, accuses Gajera, his brothers (including Ashok Gajera, based in Hong Kong), and associates of cheating, forgery, and criminal conspiracy related to Shanti Residency Pvt Ltd, a firm involved in major textile market projects like Millennium-2 and Millennium-4 in Surat.

According to the prosecution's case, Agrawal and his family originally held a 43% stake in the company. The accused allegedly siphoned nearly ₹1,928 crore. These funds were purportedly used to purchase land parcels in Surat city in the names of family members, invest in other companies, and route money abroad — including to Hong Kong via hawala — before reinjecting it into the company.

The modus operandi allegedly involved increasing the company’s share capital on six occasions without properly offering shares to existing holders like Agrawal, in violation of company law provisions.

Forged signatures of Agrawal and his family members were claimed on 14 documents, including letters declining share allotments, enabling massive share issuance to petitioner Ashok Gajera and drastically reducing Agrawal's holding to around 4%. In the petition to quash the FIR, the accused argued that the siphoning claims were mere presumptions by the complainant.

However, the court observed that the substantial reduction in shareholding from 43% to 4%, coupled with large infusions by Ashok Gajera and corresponding share allotments, lent credence to the allegations." The allegation prima-facie does not appear to be baseless," the court noted, adding that a thorough investigation is necessary to ascertain the truth. The court emphasised that the record shows significant funds brought into the company by one of the petitioners, but the overall circumstances warrant probe into the alleged intent to dilute the informant's stake and misappropriate profits.

The case, involving charges under relevant sections for cheating, forgery, and conspiracy, remains under investigation by the Surat Crime Branch's economic offences wing. Earlier developments saw police issuing lookout circulars against the Gajera brothers.