New Delhi, Oct 13 : The Enforcement Directorate (ED) on Friday said that it has arrested Nirmal Kotecha, Pavan Kuchana and Kishore Tapadia in connection with its probe into the case of Initial Public Offer (IPO) scam of Taksheel Solutions Limited. The three were arrested under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 on Wednesday. They were produced before the Court of MSJ in Hyderabad on Thursday that sent them to judicial custody till October 25. The ED said that Kotecha and Kuchana are presently residents of the Republic of Vanuatu and US respectively. The ED case is based on the complaint filed by the Securities and Exchange Board of India against Taksheel Solutions Limited, its promoters or directors and others for irregularities with respect to IPO of 55,00,000 shares of Rs 10 each for which issue price was fixed at Rs 150 and through which Taksheel raised Rs 80.50 crore. The agency said that its probe revealed that Kuchana, Kotecha and Tapadia formulated a meticulously planned strategy to inflate the revenue of Taksheel Solutions Limited for issuing IPO and for subsequently diverting and siphoning off the IPO proceeds. "To facilitate the issue of IPO, Kotecha arranged Inter-Corporate Deposits (ICDs) of Rs 34.50 crore to Taksheel Solutions Ltd. The said funds were rotated through US based entities belonging to Kuchana and circular transactions were done with Taksheel Solutions Ltd. before the IPO which resulted in incremental revenue and corresponding inflation of profitability. Subsequent to the IPO, the ICDs were repaid from the IPO proceeds," the financial probe agency said. During the probe it was also found that out of the IPO proceeds of Rs 80.50 crore, an amount of Rs 34.50 crore was diverted and siphoned off to the US-based entities of Kuchana on the pretext of payment for supply of services. "From these US based entities, an amount of Rs 30.50 crore was further transferred to Singapore or Hong Kong based entities under the control of Kotecha. Out of the IPO proceeds, another amount of Rs 23 crore was transferred to Indian entities in the guise of purchase of software products and was eventually transferred to Kotecha's entities based in Hong Kong and Dubai," the ED said. The agency said that proceeds of crime of Rs 18 crore were transferred from Taksheel Solutions Ltd. to various individuals or entities on the pretext of IPO related expenses, payments to vendors, STPI development expenses, salaries, etc. /IANS