Niranjan Hiranandani, chairman of London-listed Hirco Plc, has resigned in the backdrop of the Central Bureau of Investigation (CBI) inquiry against him in a possible breach of the Employees Provident Fund Act.
In August this year, the CBI registered a case against Niranjan and his brother Surendra Hiranandani for not paying PF dues of workers worth Rs 168 crore to the Employees Provident Fund Department, during 2003 to 2006.
Though the CBI issued look-out notices against Hiranandani brothers, a special court in Mumbai granted them anticipatory bail.
Though initially, the PF department had claimed the non-payment was Rs 168 crore but later brought it down to Rs 9.36 crore, Hiranandani argued in the bail plea.
"I have stepped down because of governance issues and pending CBI inquiry," said Hiranandani. As an interim measure, the Hirco board has appointed David Burton as the chairman of the company.
"Although the allegations are personal to Hiranandani and do not concern any of Hirco PLC's investments, he has nevertheless concluded the recent press coverage risks unwarranted damage to the reputation of the company," Hirco said in a statement.
Hirco is a investment vehicle of Hiranandani family and listed on Alternative Investment Market (AIM) of the London Stock Exchange (LSE). Hirco is developing projects in Chennai and Panvel near Mumbai.
Earlier this year, Hiranandani emerged winner in his long-drawn fight with Laxey Partners, an activist shareholder in the company which had been campaigning to remove the board of directors, including Hiranandani.
However, Hirco had to defer a plan for reverse takeover of the Hiranandani group companies with itself, following a backlash among investors led by Laxey, which described the proposal as "shocking and ill-conceived".
