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CBI quizzes Soros-Chatterjee group for purchase of Cyberspace shares by GIC

The CBI has questioned officials of a private firm, which owns stakes in the General Insurance Corporation's Assets Management Group, in connection with its probe into the acquisition of Rs 30 million worth of the Cyberspace shares by GIC Mutual Fund when its prices were falling, sources said on Monday.

Sources in the Central Bureau of Investigation said that the officials of Soros-Chatterjee group, which owns 40 per cent shares in GIC's Assets Management Group, were questioned recently for purchase of 35,000 shares of Cyberspace Infosys Limited on June 24, 2000, when the company was not faring well at the stock market.

They said Arvind Johari, one of the directors of Cyberspace Infosys Limited, had allegedly used the services of Rakesh Mehta, a Bombay-based stock broker (already arrested), for bringing in investment from government investment institutions.

The sources said Mehta had allegedly arranged buying of a large chunk of Cyberspace shares through small companies.

After the huge investment by Unit Trust of India and GIC's Mutual Fund, the Cyberspace Infosys Limited witnessed a sudden spurt in investments and other small finance companies and even foreign institutional investors also stepped in with their chunk of money.

The agency sources said the decision to interrogate the officials of private financial group was taken after the CBI seized some files of the GIC to ascertain as to why an investment worth Rs 32.5 million was made into the company when its performance was not good.

CBI has alleged that Johari had induced top UTI officials through Rakesh Mehta to buy 3,45,000 shares of Cyberspace at an exorbitant price of Rs 930 per share, resulting in a loss of Rs 320 million to the financial institution.

According to the FIR, the accused were involved in a criminal conspiracy for a shady deal in shares of Cyberspace Infosys Ltd, owned by Johari, to cause wrongful loss of Rs 320 to UTI.

CBI also suspects that the former UTI chairman has accounts in foreign banks and has begun investigation in that regard.

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