PD Limited which is a public limited Company incorporated on 1st January, 2000 under the provisions of Companies Act, 1956. The main object of the company is to promote the formation and mobilisation of capital and to pr

PD Limited which is a public limited Company incorporated on 1st January, 2000 under the provisions of Companies Act, 1956. The main object of the company is to promote the formation and mobilisation of capital and to promote industrial finance by way of advance, deposits, lending money, to manage the capital, saving and investment, to act as a discount and acceptance. Further, it is also stated that the company can carry on and undertake business of finance and trading, refinance, to act as or carry on the business of consultants, advisors, experts and technical collaborators in matters pertaining, without prejudice to the generality of the foregoing, portfolio management services, syndication of loans, counselling and tie-up of project and working capital, infrastructure of finance, corporate restructuring, corporate planning and strategic planning, foreign currency lending or borrowing, project planning and feasibility, investment counselling, setting up of joint ventures and further perform any other kind of role as an Intermediary or Advisor in the security market. The PD Limited has a wholly owned subsidiary company and that subsidiary company has subsidiary company. These companies are formed for the same objects as of the main company. The company launched various public deposit schemes such as saving deposits, fixed deposits and recurring deposits. The total amount of public deposits collected by the Company amounts to ₹ 1400.00 crores. However only 19% of the above amount has been invested by the company in statutory liquidity ratio. In the year 2019, it is observed that various complaints came to be lodged by the depositors and creditors before statutory agencies like RBI on non-payment of interest and non-return of deposits. It appears that the company has failed to comply with almost all the norms prescribed for a non-banking financial company. The unpaid depositors and creditors filed a petition for the winding-up of the company. Further complaints have been lodged against the directors/promoters alleging fraudulent diversion of money and dishonest misappropriation of funds. The company apparently in financial troubles and is found struggling to pay interest and principal to the depositors. Based on the allegations, Government conducted a preliminary investigation which reveals a misappropriation of nearly ₹ 1000.00 crores. The Government has approached your firm to conduct a Forensic Audit of the PD Limited and its subsidiaries. The scope of the audit has to be formulated on the following allegations made : Non-maintenance of books of accounts and proper records; Diversion and misappropriation of funds, including acquisition of immovable properties at Mumbai and Chennai; Failure on part of the company in non-payment of invest and in repaying the deposits accepted. On the basis of the above, draw up a plan of action which you will adopt to fulfill your work to (suitable assumption may be made by you) indicate your approach in the following areas: (d) Legal steps that could be taken against company, its subsidiaries and their directors.