The ship brokerage accounts
27 In January 2006, Mr Bangad incorporated Genus and he and his wife, Rashmi, became directors of that company. In February 2007, Messrs Sridhar and Bangad incorporated another of the cross-defendants, SS Oceanwind Shipping Pte Ltd, became its directors and opened a bank account in its name. The Suzlon parties do not now seek relief against SS Oceanwind because it was deregistered on 8 July 2009. By late October 2007, Mr Sridhar caused STS to acquire 10 ordinary shares in Bluewind and he became a director of Bluewind in late April 2008. Also, by late September 2007, Messrs Sridhar and Bangad had incorporated BIP and become its directors and shareholders. In addition, both Mr Sridhar and Mr Bangad were beneficial owners of BIP's bank account with Credit Suisse.
28 From about January 2006 to October 2008, Messrs Sridhar and Bangad represented to the Suzlon parties that they had not been able to procure sufficient ships to carry cargo for the Suzlon parties and that each of SS Oceanwind, Genus, Bluewind and BIP was an independent arm's length third party. Their dealings with the Headway companies are further discrete examples of these frauds that I will discuss later in these reasons. Messrs Sridhar and Bangad also represented that they were not obtaining any indirect benefits or secret commissions from third parties in arranging for those parties to carry cargo on ships chartered by Suzlon Infrastructure. In Mr Sridhar's report to Mr Tanti of 21 June 2008, he wrote that:
"We have been able to go beyond Beluga as owners [of specialised ships capable of lifting the wind turbines and other equipment made by the Suzlon group] and are close to finalizing charter agreements with other ship owners."
29 From early 2007 until late August 2008, Mr Kummar prepared invoices addressed to various Suzlon parties, including Suzlon Energy, in respect of freight on the letterheads of the shipbrokers and agents AM International GmbH and MIT Chartering SAS. He also prepared and sent payment directions, authorised by Messrs Sridhar and Bangad, purporting to be given on behalf of Suzlon Infrastructure, but in fact, done without its knowledge, to each of AM International, MIT, Reliance Bulk Carriers LLC and Welkin International Logistics Inc (also shipbrokers or agents) in respect of accounts that Messrs Sridhar and Bangad had established with each of those shipbrokers or agents in the names of Suzlon Infrastructure or one of the other Suzlon parties, again without its knowledge (Suzlon [2009] FCA 1020 at [23]).
30 From no later than about May 2007, Mr Sridhar and Mr Bangad caused one of SS Oceanwind, STS, Genus, Bluewind or BIP to charge one or other of the Suzlon parties in respect of the charter of ships or carriage of cargo as if the former were independent third parties. In fact, Messrs Sridhar and Bangad, or one of them, owned and controlled those companies. They caused those companies to charge the contracting Suzlon party or a third party with which a Suzlon party dealt more than the charter hire or freight that would have been payable by that party had it contracted directly with the actual carrier. At the same time, Messrs Sridhar and or Bangad caused one of their companies to contract at a cheaper charter hire or freight with the carrier for the carriage of the Suzlon parties' cargo. Accordingly, SS Oceanwind, STS, Genus, Bluewind or BIP profited from the difference between what the Suzlon party paid it (directly or indirectly through paying the third party) and what it paid the disponent owner or carrier.
31 Messrs Sridhar and Bangad caused the Suzlon parties regularly to make payments of moneys for both genuine commercial transactions and also for improper, self-dealing transactions with corporate entities controlled by Messrs Sridhar and or Bangad including BIP, STS, Bluewind and Genus. I described the way in which this typically occurred in Suzlon [2009] FCA 1020 at [18]-[25], [39]-[40] and Beluga (No 3) [2009] FCA 1347 at [2]-[9]. In this way, each of Mr Sridhar and Mr Bangad obtained secret commissions and made secret profits from arrangements they made for ships to carry cargoes, chartered by or for, Suzlon Infrastructure or one of the other Suzlon parties.
32 Mr Sridhar and Mr Bangad had been indicted in Switzerland for money laundering conducted there between 2004 and 2009 while employed by Suzlon Energy. Mr Jhawar was present during examinations of Mr Sridhar and Mr Bangad by the Swiss public prosecutor in Pune, India, and received the French language minutes of those examinations together with official English translations. The Suzlon parties relied on a number of admissions by each of Mr Sridhar and Mr Bangad that Mr Jhawar affirmed having heard them make in English during the examinations. In those circumstances, those admissions are admissible under ss 81, 82 and 88 of the Evidence Act 1995 (Cth).
33 The examiner listed the relevant accounts through which he alleged the money laundering occurred as those of STS and Rodney Marsh with LB Swiss, Bluewind, STS and Manning with Merrill Lynch and BIP, Blue Ocean Consultants FZE and Manning with Credit Suisse. Mr Sridhar admitted opening each of those eight accounts. He said that he was once the beneficial owner of STS, but at the time of the examination he claimed that he no longer was. He confirmed, however, that he was still the beneficial owner of the STS account with LB Swiss. Mr Bangad admitted that he and Mr Sridhar were each 50% shareholders of BIP and that they had opened an account for BIP with Credit Suisse. Mr Bangad admitted that he was the beneficial owner of that BIP account.
34 MIT's statements of account for "Suzlon" (being one of or more of the Suzlon parties) for the period 10 September 2007 to 18 December 2008 showed that MIT received USD1,439,978 from "Suzlon" on 10 September 2007 and a further USD2,018,000 on 24 September 2007. MIT made two payments, one to Reliance Bulk of USD789,978 on 13 September 2007 and the other to BIP of USD1,000,000 on 4 October 2007. MIT made a further payment to BIP of USD800,000 on 12 November 2007.
35 The transfer of the USD1,000,000 to BIP came about in the following way. On about 1 October 2007, Mr Kummar at the request of one or both of Mr Sridhar and Mr Bangad directed MIT to transfer USD1,000,000 to BIP towards the future hire and fuel charges due on a charter of SCL Thun. I described this dealing in Suzlon [2009] FCA 1020 at [20]. Accordingly, Mr Kummar knew, or had such notice as would put an honest and reasonable person in his position on enquiry, of the following. First, Suzlon Infrastructure had not authorised that payment to BIP, had no record or dealing relating to its being liable to BIP for such a payment in respect of SCL Thun and had no record of any charterparty or other dealing that evidenced that BIP was the owner, a charterer or agent of anyone in relation to that ship. Secondly, Mr Bangad later directed Mr Kummar to inform MIT that the vessel in respect of which the payment to BIP was due was MS Sea Wind II, in circumstances where that vessel was a passenger ferry, was unsuitable for the carriage of cargoes shipped to or by the Suzlon group and Suzlon Infrastructure had no record or other evidence of any possible hire by it of that ship. Thirdly, when Mr Kummar informed Mr Bangad that they had a previous representation purportedly on behalf of Suzlon Infrastructure to MIT in respect of this payment that concerned SCL Thun, Mr Bangad immediately changed his instruction to require Mr Kummar to maintain in his dealings with MIT that the relevant ship was SCL Thun. Fourthly, neither BIP nor anyone else had rendered Suzlon Infrastructure, or any other Suzlon entity, any invoice, payment request or direction directing or requesting that BIP be paid in relation to the hire or future hire of SCL Thun.
36 It follows that Mr Kummar was knowingly involved in the fraudulent transfer, caused by Messrs Sridhar and Bangad, of USD1,000,000 from MIT's account in Suzlon's name, being an account for Suzlon Infrastructure.
37 On 30 January 2008, MIT sent €1.25 million from the account to Bluewind and later on 10 April 2008 sent Bluewind a further €0.75 million (see too Suzlon [2009] FCA 1020 at [25]-[26]). Similar significant payments, on the evidence, were made by MIT, RBC, AM International and Welkin to various of the companies owned or controlled by Mr Sridhar and Mr Bangad.
38 There is no apparent innocent explanation as to why "Suzlon's" account with MIT should have been used to remit large round figure sums to BIP and Bluewind, companies beneficially owned and controlled by both or one of its employees, Mr Sridhar and Mr Bangad. On 18 December 2008, in the last entry on the MIT statement, USD1,227,291 was transferred to "BIP Carriers" that resulted in a nil balance on the account.
39 Suzlon Infrastructure opened an account with Reliance Bulk by a payment of USD592,779.88 made on 27 June 2007. Reliance Bulk's statement of account for Suzlon Infrastructure for the period 1 June 2007 to 6 August 2008 recorded further payments to Reliance Bulk which, in turn, paid various parties, including Beluga, out of the account. On 18 July 2007, Reliance Bulk paid USD800,000 from the account to STS. On 23 July 2007, Reliance Bulk paid STS another USD200,000 (see Suzlon [2009] FCA 1020 at [18]). Initially, in an email of 16 July 2007, Mr Bangad had directed Reliance Bulk to make the two payments totalling USD1 million to Rodney Marsh's account with LB Swiss. However, Reliance Bulk queried this in its email in response. That email said that "such large transactions like these, esp to Swiss private acct raises red flags due to federal security regulations". Reliance Bulk said that the payments should be made preferably to a company with proper documentation "plus an invoice or other supporting document from Suzlon". Ultimately, Messrs Sridhar and Bangad caused Reliance Bulk to send the total of USD1 million to STS' LB Swiss account. It is clear that these transactions were a fraud on Suzlon Infrastructure and caused it to pay the USD1 million to Mr Sridhar's company, STS.
40 Another example of the use of shipbrokers is furnished by what Mr Bangad did in relation to SS Oceanwind and Genus which I described partly in Beluga (No 3) [2008] FCA 1989 at [10]-[19]. First, as I found there, Mr Bangad signed and approved two Suzlon Energy payment advices in May 2007 for a total payment to SS Oceanwind of USD1,126,089, and he and Mr Sridhar signed a letter dated 18 May 2007 on behalf of Suzlon Energy to its banker, IDBI Bank Ltd, authorising the payment of that sum. That bank acted on that authority and paid SS Oceanwind on the same day. Secondly, Mr Bangad forged, or put forward a forgery, of the signature of Jitendra Tanti as a director of Suzlon Infrastructure on a letter dated 27 September 2007 that was in identical terms to the letter dated 25 September 2007 that Mr Bangad had signed, that I described in that judgment at [12]. Both letters contemplated that Reliance Bulk would receive and disburse finds for Suzlon Infrastructure in respect of the "following vessels under our charter", being Margaretha Green and Beluga Fusion. The letter purporting to be signed by Mr J Tanti was created on Mr Bangad's computer. Mr J Tanti denied that he signed the letter or authorised it to be signed on his behalf and his signature on his affidavit of 2 December 2008 is very different to the forgery.
41 Reliance Bulk's statement of account in evidence showed that it paid Genus USD59,200 on 27 June 2007 noted as "payment on behalf of SIL" (i.e. Suzlon Infrastructure). Genus had an account with Axis Bank Limited, in India. Genus' Axis Bank statement recorded receipt of that sum on 29 June 2007.
42 That Axis Bank statement also recorded Genus' receipt of a total of about USD920,000 in three payments of about USD350,000 on 13 March 2008, USD320,000 on 2 April 2008 and about USD250,000 on 12 May 2008. Emails recovered from Mr Bangad's and Mr Kummar's Suzlon work computers explain that how the latter two of those payments to Genus came to be made.
43 Mr Bangad had requested Coli Schiffahrt & Transport GmbH & Co KG of Hamburg, Germany, to make those payments respectively in respect of freight carried on Margaretha Green and Beluga Fusion respectively by emails on 28 March 2008 and on 2 May 2008. However, at the time of each of those requests, each ship was under time charter to Suzlon Infrastructure. Accordingly, any freight earned in respect of either ship was payable to Suzlon Infrastructure as charterer, not to Genus. The source of the USD350,088.53 that Genus received into its Axis Bank account on 13 March 2008 is not in evidence but I infer that it was also a payment that Mr Bangad fraudulently diverted from the Suzlon parties. The Axis Bank account is replete with entries recording payments to Mr Bangad and his family members.
44 Mr Sridhar and Mr Bangad also used other means to channel money out of the Suzlon parties involving the four shipbrokers. One example occurred in May and June 2008 when Suzlon Energy processed and paid two invoices on MIT letterhead for the same cargo, being 10 sets of rotor blades for carriage from Kandia, India to Freeport, USA on Aquilla Companion. Both invoices were dated 5 May 2008 and were identical, save for the freight rates and total amounts payable. Suzlon Energy processed the first MIT invoice, for a total of USD723,600, based on the signed authorisations of Messrs Bangad and Sridhar, and possibly Mr Kummar, as part of a freight payment of USD2,836,188.78 for a larger shipment that MIT received on 28 May 2008. About one week later, Suzlon Energy processed the second MIT invoice, for a total of USD1,005,000, and MIT received it on 4 June 2008. No signed authorisation for that payment within the Suzlon parties is in evidence, but it appeared to have been processed in the usual manner.
45 On 19 June 2008, MIT paid Headway Chartering USD10,000. Next, on 7 July 2008, MIT paid Genus USD400,000 and on 6 August 2008 it paid Headway Shipping USD500,000. I infer that those payments were not in discharge of bona fide debts due by Suzlon Infrastructure (which was the client of MIT) or any of the Suzlon parties. It is likely that those payments were a means by which most of the USD1,005,000 charged in the second MIT invoice of 5 May 2008 was siphoned from their employer by Messrs Sridhar and Bangad. Genus' Axis Bank account recorded the receipt of the USD400,000 on 11 July 2008. As I have noted, on 18 December 2008, the MIT account was closed by the payment to BIP of the balance of USD1,227,291. That occurred within two weeks of Mr Sridhar's suspension.
46 Mr Bangad caused Reliance Bulk to conduct an account in the name of SE Shipping which he closed in early August 2008 around the time that he ceased to be an employee of Suzlon Energy. This was when Mr Bansal was experiencing difficulties in obtaining information and co-operation from Mr Bangad in respect of SE Shipping's operations. On 5 August 2008, Mr Bangad, using his Suzlon email account, instructed Reliance Bulk to transfer the balance of the funds in that account to Headway Shipping. On 6 August 2008, Reliance Bulk emailed Mr Bangad informing him that it had remitted USD339,166.29 to Headway Shipping as he had instructed.
47 In his affidavit of 19 September 2014, Mr Jhawar said that none of the four shipbrokers now holds any money in the account of the relevant Suzlon party used to effect the maritime frauds.
48 In summary, the evidence currently available to which I have referred established that Messrs Sridhar and Kummar defrauded Suzlon Energy and Suzlon Infrastructure through use of the various shipbrokers' accounts through the following means:
(1) BIP received a total of USD 3,027,291 from the MIT account misappropriated from Suzlon Energy, being the following payments:
Paragraph Date USD
[39] 23 July 2007 1,000,000
[34] 12 November 2007 800,000
[45] 18 December 2008 1,227,291