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Process issued against tainted broker Hiten Dalal, 6 others

On a chargesheet filed by CBI, a special court has issued 'process' against stock brokers Hiten Dalal and Pallav Sheth and five bank officials for alleged misappropriation of funds to the tune of Rs 69.3 million through fraudulent means in call money transactions.

The process was issued yesterday by justice A B Palkar who took cognizance of the chargesheet filed by CBI against Dalal and others for their alleged complicity in a 1991 scam.

On submissions made by CBI counsel Raja Thakare and A M Chimalker, the court ordered the accused to appear before it on January 30 next. Dalal is undergoing conviction in a cheque bouncing case and will be brought to the court under police escort on that day.

Besides Dalal and Sheth, the other accused are Raghuvir Acharya and B V Srinivas, former general manager and former funds manager of Canbank Mutual Fund (Bombay) respectively, M K Ashok Kumar, former executive vice president of Canbank Financial Services (Bangalore), S Mohan and N Balasubramanian, former assistant vice presidents of Canbank Financial Services (Bangalore).

They have been charged with IPC sections 120-b (conspiracy), 409 (criminal breach of trust), 420 (cheating), 468 (forgery), 471 (using as genuine forged document) and 477-a (falsification of accounts). The accused have also been booked under section 13 of Prevention of Corruption Act (PCA).

According to CBI, Canfina could neither lend nor borrow money in call money transactions as per RBI guidelines. Yet, Acharya and Srinivas lent Rs 63 million to Canfina Financial Services.

The accused allegedly prepared false documents and the money went to a broking firm in Calcutta ostensibly towards purchase of 210,000 Hindalco shares on September 9, 1991.

The shares ultimately did not reach Canbank Mutual Fund in Bombay.

In the same transactions, brokers Dalal and Sheth received a portion of Hindalco shares as stolen property.

The CBI was able to identify these shares due to distinctive numbers available with the Calcutta-based firm. The numbers tallied with the ones in possession of Dalal and Sheth.

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