Tuesday, May 3, 2011

IPO scam: ED confiscates assets worth 100 crore ,Seven Corporate Honchos Summoned

Ahmedabad: The Enforcement Directorate (ED), Ahmedabad, has attached assets, including shares, vehicles and property, worth Rs 100 cr in the country’s biggest initial pubic offering (IPO) scam which was unearthed in 2005.
The assets belong to the investors and stock brokers accused in the multi-crore scam in which Ahmedabadbased stock broker Roopal Panchal was named as the main conspirator.
Sources in the ED, Ahmedabad, said that the case will see more attachments as the agency is closing in on the financers – corporate biggies and realtors. Some of these accused, whose links to the scam were unearthed recently, have been summoned for questioning, said ED officials.
ED has recently filed complaints under the Money Laundering Act against Roopal Panchal and others who had created more than 14,000 bogus demat accounts for subscribing to IPOs of various companies in order to get more shares.
ED sleuths have now started hunting down the Ahmedabad and Mumbai-based financiers who pumped in crores of rupees through the Panchal family. ED has slapped summons to seven high-flying corporate honchos in the case.
“Apart from assets of Panchal family, we have attached a house in Delhi, belonging to one of the key players in the scam and also properties worth Rs 39 cr of Mumbai-based practicing chartered accountants Dushyant and Poornima Dalal,” said an ED official.
Investigation revealed that Dalals had financed two Mumbai-based stock operators and cornered shares of 10 IPOs between 2003 and 2005.
A Securities & Exchange Board of India (SEBI) investigation had found that kingpin Panchal had sold off 931,600 shares of Yes Bank through seven off-market transactions on July 11, 2005, prior to the listing and commencement of trading on the stock exchanges.
SSEBI had in February this year slapped a fine for Rs 36 crore to six members of the Panchal family — Roopal, Devangi, Dipak, Hina and Bhargav.
Several agencies, including the income tax department and CBI have conducted parallel inquiries in the case. I-T department in 2005 and 2006 carried out search and survey operation on 32 premises belonging to stock brokers, financers and businessmen involved with the scam.

Roopal not the mastermind

Investigators probing the IPO scam have found that though Roopal Panchal became the face of the case, she is not the mastermind. ED officials during investigations found that the real mastermind behind the scam is Roopal’s brother-in-law Deepak, who in her found a safe covering and carried out his clandestine operations from behind the curtain.
“Deepak along with others procured photos and documents to open thousands of bogus demat account. Roopal’s husband Naresh was not doing well in his business, and had two teenage kids to look after and she was easily persuaded to assist Deepak,” said an ED official.
He added that Roopal had little knowledge of what Deepak was up to and she never thought that the scam would snowball into something this big.

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