Brokerage firm manager held for helping woman siphon off ₹4.58 crore from senior citizen’s demat account

MUMBAI: A 76-year-old South Mumbai businessman allegedly lost shares worth ₹4

MUMBAI: A 76-year-old South Mumbai businessman allegedly lost shares worth ₹4.58 crore after a woman gained control of his demat account, sold his existing investments and used the proceeds to buy penny stocks that are now virtually impossible to sell. The South Cyber police have arrested a manager with a leading stockbroking firm for allegedly helping her execute the transactions.

The accused, identified as Nitesh Singh, allegedly facilitated the purchase of the penny stocks in return for a commission. The police had earlier arrested the woman, Pusha Bind, a share market adviser from Kandivali, who allegedly orchestrated the fraud.

The complainant, a resident of Breach Candy Road, approached the South Cyber police after discovering that shares worth ₹4.58 crore had disappeared from his demat account. Investigators found that his existing portfolio had been liquidated and the proceeds used to purchase low-priced, thinly traded stocks.

While the police managed to freeze and recover investments worth ₹2.86 crore, the remaining amount had already been channelled into penny stocks, which have since incurred losses. The businessman is now unable to liquidate these holdings as there are virtually no buyers for them.

According to investigators, Bind had first met the businessman and obtained details of his demat account. She allegedly tried to persuade him to transfer his account to another brokerage firm, but he refused.

She then allegedly procured a SIM card registered in the businessman’s name and previously linked to his demat account. By gaining control of the number, she could access one-time passwords (OTPs), change account passwords and carry out transactions without his knowledge, the police said.

“She changed the passwords, gained access to the OTPs and sold the shares. We contacted the National Stock Exchange and the Bombay Stock Exchange and froze whatever transactions we could, successfully saving ₹2.86 crore,” said senior police inspector Nandkumar Gopale of the South Cyber police.

Investigators allege that Singh, who worked with a leading brokerage firm in Kandivali, helped Bind purchase the penny stocks and received a commission for facilitating the transactions. Both accused allegedly earned commissions for routing the money into these stocks and dumping them into the complainant’s portfolio.

The police said the remaining funds were effectively locked into stocks that have since lost value and are difficult to trade because of the absence of buyers.

Bind is also under investigation in two other cheating cases. She allegedly cheated a businessman of ₹3 crore in a Santacruz case and another person of ₹1.2 crore in a case registered at Azad Maidan police station. She had previously worked with a stockbroking firm but was asked to resign, an officer said.