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Police launch full-scale probe into CSE scam

Calcutta, Sept. 26: After several inquiries were conducted by the Joint Parliamentary Committee, Securities and Exchange Board of India (Sebi) and the Calcutta Stock Exchange, the Calcutta Police have launched a full-scale investigation into the stock market scam that surfaced in March last year.

Soumen Mitra, deputy commissioner of the detective department, said: “The Calcutta Stock Exchange filed a complaint some ten days ago, on the basis of which we have arrested six brokers, and are on the pursuit of more. We will have to probe the scam in details and will seek details from the exchange and other authorities.”

Officials of the Calcutta Stock Exchange and the sleuths of the Calcutta Police had an extended meeting today even as raids continued in various parts of the city, and the six brokers arrested on Wednesday, were interrogated.

Indications are the investigation could lead to detention of even those not named in the bourse’s FIR. Though the bourse’s complaint mainly implicates the three groups that did not fulfil their payment obligations to the bourse, those that had close links with them may also face further probe.

The charges pressed against the six brokers detained so far include manipulation of share prices through collusive transactions and misappropriation of public money.

The payment crisis had brought to the fore links between the defaulters and a host of brokers in Calcutta and Mumbai, including Ketan Parekh.

The police have frozen the bank accounts of many of the brokers named in the complaint, and have asked the authorities to furnish details of transactions. Going forward, a number of banks too may get dragged into the probe.

At least one private bank — IndusInd Bank — was swindled by one of the detained brokers and his associates. The bank has since moved the Debt Recovery Tribunal for recovery of dues.

In a related development, the police today raided the office of DSQ Software in Calcutta. The police found the office abandoned. The company had lent funds to a stockbroking firm in the city, and had close links with the Biyani group.

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