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Rs 6 lakh gone in demat fraud

Two local businessman recently found that shares worth Rs 6 lakh had vanished from their demat accounts, reports Ashok Das.

india Updated: Jun 27, 2007 02:47 IST
Ashok Das
Ashok Das
Hindustan Times

If you are an investor in shares and sitting pretty under the impression that your stocks are safe in your demat account, think again.

Two local businessman recently found that shares worth Rs 6 lakh had vanished from their demat accounts though the delivery instruction books (equivalent to a bank cheque book) in their possession were intact.

P Shiva Kumar and B Raju, both from Karimnagar district, have lodged a complaint with the S R Reddy Nagar police station alleging that they have been defrauded of their shares held in two demat accounts in the local branch of the Stock Holding Corporation of India Ltd (SHCIL). The duo said they had not bought or sold any shares in the past year but kept the accounts active by regularly remitting the statutory charges levied by the SHCIL.

They grew suspicious after they did not receive the quarterly statement of their accounts for the period January-March 2007. Sensing something wrong, they approached the SHCIL branch officials, who informed them that their shares had been transferred to two other demat accounts "as per client instructions".

Shiva Kumar and Raju did a little digging and found out that some miscreants had prepared a fake voter identity card and PAN card of the former and a driving license of the latter. Using these fabricated documents, they had got the shares transferred to other demat accounts.

"We suspect some connivance on the part of the staff," Shiva Kumar said. "We have registered a case under Sections 419, 420,468 and 471 of the Indian Penal Code and are investigating the matter. We are in the process of verifying the handwriting in the original documents," said Inspector Venkataratnam of the S R Nagar police station.

First Published: Jun 27, 2007 02:07 IST