Financial Daily from THE HINDU group of publications
Thursday, Feb 23, 2006
Financial Daily from THE HINDU group of publications Thursday, Feb 23, 2006 |
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Markets
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IPOs Industry & Economy - Economic Offences IPO scam fall-out — CBI conducts search at Karvy, Vijaya Bank, BhOB premises Our Bureau
Hyderabad , Feb. 22 CLOSE on the heels of assurance of the Union Finance Minister, Mr P. Chidambaram, to the Lok Sabha last week on stringent action on culprits in the recent IPO scam, the Central Bureau of Investigation (CBI) has on Wednesday conducted searches at 21 places of officials and brokers in three cities including the National Capital Region in connection with the IPO scam in YES Bank and Infrastructure Development Finance Corporation (IDFC) involving Rs 32 crore of fraud. Following the case filed by the Securities and Exchange Board of India on the issue, the CBI's Bank Fraud and Securities Cell (BF&SC) is learnt to have conducted the searches. According to sources, the CBI teams conducted searches at 15 places in Ahmedabad, five places in Mumbai and one place in Delhi against certain individuals, bank managers and lead managers to the said IPOs. The premises searched by the CBI teams include that of the applicants in the said IPOs, Managers of bank branches, stockbrokers and Depository Participants. The CBI has also registered a few cases against certain people involved in the depository participant (DP) accounts and also on certain officials of Bharat Overseas Bank and Vijaya Bank. Earlier, the capital markets regulator probed into alleged irregularities in the allotment of shares in the IPOs of YES Bank and IDFC and found that a few persons had fraudulently opened thousands of demat accounts with DPs such as Karvy and bank accounts in the names of fictitious entities to obtain allotment in the IPOs. According to SEBI, this has deprived the retail individual investors (RIIs) of their share of allotments in the IPOs. When contacted, the Karvy Chairman, Mr C. Parthasarathy, denied any searches or raids by the CBI on Karvy offices. "The CBI teams did approach us today and sought our assistance in their investigation into the IPO scam. They have asked us to provide the details of the alleged fraudulent applications submitted by certain entities for opening DP accounts with us. We are cooperating with the CBI personnel in their probe," he told Business Line.
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