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IGF gives list of cos to SEBI suspecting scams

A list of 25 cos that are suspected to be operating bogus Demat accounts has been handed over to market regulator SEBI.

india Updated: Jan 24, 2006 19:08 IST

A list of 25 companies that are suspected to be operating bogus Demat accounts has been handed over to market regulator SEBI by Investor Grievance Forum demanding a probe into their operations.

"We have given a list of over 25 companies to the Securities Exchange Board of India (SEBI). According to our information, Benami Demat Accounts have been used in these companies. A similar list is also with Reserve Bank of India (RBI) regarding the Yes Bank and IDFC IPO scam," IGF president and former BJP MP Kirit Somaiya told newspersons.

In both these lists, two names were common. One was Dhiren Vora, a broker with H Nyalchand and Company in Ahmedabad, and Aman Shah, an investor financer.

"Both these men are majorly involved in the Demat scam. We have demanded that all the transactions of these two in 2005 should be investigated," he said.

He also demanded all the IPOs of 2005 be investigated by the Economic offences Wing of Gujarat and Maharashtra.

Some of the names in the list were Bombay Rayon Fashions Ltd, Piramyd Retail Ltd, Suzlon Energy Ltd among others.

According to Somaiya, there were anomalies in the 2005 IPOs.

"In 2001 to 2004 the premium was marginal. But in 2005, more than 40 companies have raised Rs 12,871 crore through 124.30 crore shares. Premium collected was Rs 11,628 crore," he said.

"The modus operandi used by them is same in most public issues. Using bogus Demat accounts of Rupalben Panchal and others, the rent snd charges paid are between Rs 150 and Rs 250 per transaction," he said.

According to him, the Investors' Grievances Forum (IGF) was "surprised" though SEBI had already got information from NSDL about seven Issues, apart from Yes Bank and IDFC, it was not disclosing the details.

"We want to know why SEBI, RBI and Finance Ministry are not informing the common investors. It should come out with the information in public interest," he said.

He also regretted the blame game going on betweenSEBI and NSDL regarding the scam.

"Though NSDL and SEBI higher officials had not connived in the scam, but were busy trading charges at each other. We have urged the Finance Ministry to end this internal squabble and pin down the scamsters," Somaiya said.

He said the recent bogus Demat Accounts Opening Scam was not a systemic failure alone, but a fraud with an operator-broker-financer nexus.

"It is a bogus demat scam. With the help of bogus demat accounts, illegal financing, operator-financer-promoter nexus, prices of many public issues were inflated and manipulated," Somaiya told reporters.

First Published: Jan 24, 2006 18:02 IST