The Telegraph
Since 1st March, 1999
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Scam hunt shifts to Stock Holding Corp

Calcutta, Oct. 4: The police dragnet is closing in on Stock Holding Corporation of India Ltd (SHCIL) — the country’s largest depository and custodian of securities — which was recently hauled up by the Securities and Exchange Board of India (Sebi) for abuse of its ‘sell-n-cash’ scheme.

The Calcutta Police said they had made significant progress in identifying SHCIL officials who might have been involved in the multi-crore securities scam unearthed in March last year.

At least two internal inquiries have been conducted by SHCIL for the abuse of its ‘sell-n-cash’ scheme last year by a handful of high-profile brokers including Harish Chandra Biyani, one of the key accused in the case being probed by the Calcutta Police.

DC (DD-I) Soumen Mitra also said the team from Mumbai Police had started working in tandem with sleuths of the city police. The Mumbai Police today obtained the metropolitan magistrate’s approval to take two of the detained brokers — Raj Kumar Patni and Gopal Singhania — to Mumbai for investigation and production in cases pending in courts there.

In a related development, metropolitan magistrate P. K. Tiwari remanded all the eight detained by the Calcutta Police in jail till November 15.

The police described the rejection of their plea for extension of remand in police custody, as “a major setback” to the ongoing investigation. The police will seek review of the order on Saturday with a new public prosecutor representing them.

Senior officers of the detective department of the Calcutta Police said Satya Choudhury, the public prosecutor who represented the state so far in this and many other cases, was being disengaged from this case.

“We had just unearthed links with the rukka purja and hawala — private financing and money transfer — agents, and we needed to keep the accused in police custody for some more time. Today’s order upsets our plans, and we will seek review,” a senior officer of the detective department said.

The magistrate, however, said the accused had spent sufficient time in police custody. “However, considering the importance of the case and the fact that investigation is still at an infant stage, the application for bail is being rejected,” Tiwari said.

The chief metropolitan magistrate, S. C. Misra, who had heard the matter so far, was busy with administrative work, and was replaced by Tiwari in today’s hearing, which ran for an hour.

Lawyers defending the accused said the Calcutta Stock Exchange was trying to “cover up its own dereliction”. It could have easily recovered the dues of the defaulter-members but could not due to delay in taking the appropriate steps.

Meanwhile, Dinesh Singhania, the former CSE president now on the run, has filed an appeal in the Calcutta High Court, against the decree obtained by the exchange to recover Rs 5.82 crore plus interest from him.

Singhania, the police say, has fled the city and his attorney filed the appeal on his behalf. The decree empowers the exchange to attach properties owned by Singhania for the recovery of the amount.

Sebi ban

PTI adds: Continuing with their action against vanishing companies, the Securities and Exchange Board of India (Sebi) today barred five companies, based in eastern India, and their 16 directors from accessing capital market for five years.

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