New Delhi, Oct 9 (UNI) The CBI has filed a chargesheet in Mumbai against 22 people and entities involved in the IPO scam in which two criminal cases were filed in 2006.
The investigating agency has also filed a chargesheet against officials of the Bharat Overseas Bank and Indian Overseas Bank, who had deliberately flouted the KYC norms to open thousands of fictitious bank accounts and also sanctioned loans to such fictitious applicants.
The cases were registered on a complaint from SEBI in February, 2006.
Thousands of applications in the name of fictitious persons were submitted to corner shares received in the Retail Individual Investors (RII) category.
Many photographs were downloaded from websites including www.shaadi.com-- and pasted on application forms under different names with a common postal address.
Bank and DEMAT accounts were opened by forging documents. The depository participants took no tangible steps to weed out and reject these fictitious applications, a CBI official said.
''Instead, they connived with middlemen to provide funds,'' he added.
In several instances, the bidding was done without subscription money.
He said the Registrar to the Issue raised no objection in accepting the share application forms which were not accompanied by the local cheques/DD for the subscription money, a mandatory requirement.
''Such applications though ineligible, shares were allotted to these fictitious applicants,'' he added.
''Since the people did not exist, they could obviously not take physical possession of the shares. Delivery Instructions Slips (DIS) were, therefore, forged to show transfer of the shares to the DEMAT account of the middlemen, in collusion with some depository participants,'' he added.
This was facilitated as the same market intermediary performed multiple functions of depository participant, syndicate members, financiers, Registrar to the Issue and broker.
UNI
The investigating agency has also filed a chargesheet against officials of the Bharat Overseas Bank and Indian Overseas Bank, who had deliberately flouted the KYC norms to open thousands of fictitious bank accounts and also sanctioned loans to such fictitious applicants.
The cases were registered on a complaint from SEBI in February, 2006.
Thousands of applications in the name of fictitious persons were submitted to corner shares received in the Retail Individual Investors (RII) category.
Many photographs were downloaded from websites including www.shaadi.com-- and pasted on application forms under different names with a common postal address.
Bank and DEMAT accounts were opened by forging documents. The depository participants took no tangible steps to weed out and reject these fictitious applications, a CBI official said.
''Instead, they connived with middlemen to provide funds,'' he added.
In several instances, the bidding was done without subscription money.
He said the Registrar to the Issue raised no objection in accepting the share application forms which were not accompanied by the local cheques/DD for the subscription money, a mandatory requirement.
''Such applications though ineligible, shares were allotted to these fictitious applicants,'' he added.
''Since the people did not exist, they could obviously not take physical possession of the shares. Delivery Instructions Slips (DIS) were, therefore, forged to show transfer of the shares to the DEMAT account of the middlemen, in collusion with some depository participants,'' he added.
This was facilitated as the same market intermediary performed multiple functions of depository participant, syndicate members, financiers, Registrar to the Issue and broker.
UNI
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