scham

1. C R Bhansali arrested, taken to Bombay
CRB Capital Markets Limited Chairman Chain Roop Bhansali, the prime accused in the
Rs 12 billion CRB scam, was taken to Bombay on Monday night, according to Central
Bureau of Investigation sources.
The company's vice-chairman, S K Jain, was arrested on Sunday night, Bombay Joint
Police Commissioner Ranjit Sharma said. Jain has been remanded to police custody till
June 16. Two more directors of the company, Gautam Chopra and Sushil Golcha, and
Bhansali's brother-in-law Pukhraj Jain were given remand by the holiday court, Chopra
and Golcha, till June 17, and Pukhraj Jain, till June 19.
Bhansali, who was absconding after the scam into light last month, was arrested on
Sunday night at Delhi's Indira Gandhi international airport by a special team lead by CBI
Joint Director Kumauwat Bhat, CBI Director Joginder Singh said.
According to the CBI, the team tracked Bhansali to Hong Kong, learnt he and his family
were returning to Bombay, and came back on the same flight, to arrest them at the Delhi
airport. Bhansali's counsel, however, claimed Bhansali had surrendered to the authorities.
Cases had been registered against all the accused under sections 120-B and 420 of the
Criminal Procedure Code and the Prevention of Corruption Act.
CBI Director Joginder Singh visited the metropolis last fortnight to initiate the probe.
During his stay, some raids were conducted and incriminating documents were seized. A
special co-ordination cell was also set up and the help of officials from Reserve Bank of
India, the Bombay police, the income-tax department was taken in the investigating
process, CBI sources said.
Those worst affected by the scam were mutual fund instrument holders who plan to take
the matter to court under the aegis of the Investors Grievances Forum. The IGF has
staged several demonstrations and even met the prime minister to seek his intervention to
protect the interest of small investors.
The CBI had registered a case on May 20 against Bhansali, CRB Capital Markets
Limited and some officials of the State Bank of India for cheating the bank of Rs 570
million. The company had allegedly used its SBI accounts to siphon off bank funds,
claiming it was encashing interest warrants and refund warrants of principal amounts.
Initial reports revealed that the total amount involved in the scam was over 9.31 billion,
including the money belonging to investors, the Unit Trust of India and the Gujarat
government.
Of his family, only Bhansali had been arrested. His wife Manjula, his parents, two sisters
and child were not detained, Singh said.

2. The cobbler scam
A lot of scams are being discovered in India. It looks like the
corruptions in India can never come to an end. If one corruption is
exposed another one start somewhere. It reminds me one of the
biggest multi million dollars scam in Indian History which was
nicknamed The Great Cobbler Scam.
Actually what really happened in this Great Cobbler Scam was that
various businessman & politicians had siphoned around $600
million US dollars from a scheme that was floated by the
Government of India meant to benefit the poor cobblers of
Mumbai. Instead it went into the pockets of wealthy elite peoples
who used this money to built luxury homes for themselves and also
brought luxury cars, boats, arts...etc.
The money of the scheme was meant to provide low interest loans
and tax concessions to the Mumbai's poorest - cobblers who work
16-hours a day for less than $2. Not a single penny reached these
cobblers.
The modus operandi of the mastermind was to float a cooperative
society of cobblers to avail of soft government loans through
various schemes. Several bogus societies of cobblers were formed
only for the purpose of availing these soft government loans.
The people involved in this racket were Saddrudin Daya, former
sheriff of Mumbai and owner of Dawood Shoes, Rafique Tejani,
owner of Metro Shoes, Kishore Signapurkar, proprietor of Milano
Shoes, and Abu Asim Azmi, president of Samajwadi Party's
Mumbai unit and partner in Citywalk Shoes,
Beside them various officials of banks and financial institutions
were also involved in this multi million dollars Cobbler Scam.

3. The Banks whose officials were involved in this scam are :
Maharashtra State Finance Corporation, Citibank, Bank of Oman,
Dena Bank, Development Credit Bank, Saraswat Co-operative
Bank, and Bank of Bahrain and Kuwait.
This scam cost the Government of India around $600 million US
dollars.
This was one of the worst scam in India that cheated the poorest
people of the society and benefited a lot of rich and elite people.
This is one of the cause that proverty in India is difficult to
eliminate

4. DALMIA CASE
NEW DELHI/MUMBAI, FEBRUARY 12 The Central Bureau of Investigation (CBI) finally arrested
2001 scam-accused Dinesh Dalmia in Delhi early this morning. Senior CBI sources confirmed
that Dalmia — who once headed listed companies DSQ Software and DSQ Biotech — has been
under interrogation and that the agency had been‘‘after him for a while now.’’ The CBI had an
Interpol alert against Dalmia, who has been absconding for several years now and had set up
base in the US.
The Dinesh Dalmia episode has been haunting the Indian capital market for nearly six years. It’s
a classic case of forgery, cheating, fund diversion, price rigging and brazen violation of laws of
the land. Dalmia’s Rs 945 crore preferential allotment at the height of 2000-01 stock boom turned
out to be a massive fraud.
Dalmia owes money to dozens of entities (many of them have court orders against him). Despite
having a host of regulatory orders against him, Dalmia has been hiring and paying top lawyers in
India to fight long legal battles without so much as setting foot in the country. Two months ago,
the Securities Appellate Tribunal (SAT) ordered Dinesh Dalmia to buy back unlisted shares
introduced by him in the open market at the prevalent rates when these were allotted. The shares
were issued at the height of the Bull run, when DSQ Software traded at a high Rs 2,800.
Dalmia took advantage of the euphoria in 2000-01 to increase DSQ’s capital by 50 per cent
without informing the stock exchanges. He introduced these 1.3 crore shares in the market
(originally allotted to three Mauritius-based shell companies) without getting these listed. The
ultimate beneficiary of this allotment was Dalmia himself.
The SAT asked Dalmia to buy back shares from original allottees who continue to hold these
today and had bought them between May 20, 2000 and January 12, 2001. Dalmia has been
asked to deposit a first installment of Rs 30 crore into an escrow account to finance the buyback,
while the Securities and Exchange Board of India (Sebi) has been directed to set up an authority
to conduct this transaction.
The SAT order is a modified ratification of Sebi’s earlier order, barring Dalmia from the capital
market for 10 years and ordering him to buy back 1.3 crore unlisted shares, place these in a
separate demat account and extinguish them. Sebi had calculated the unjust benefit that had
accrued to Dalmia through the dubious issue of shares as Rs 630 crore; the value of shares
issued then was Rs 945 crore. Even after the scam came to light and Dalmia was absconding, he
moved on to the BPO business and was known to be running major call centres at Gurgaon,
Bangalore and Chennai.
He was making news in the US also. With US investigators and lenders far more determined at
hunting down Dalmia’s global operations, the default of his company Allserve in New Jersey and
his claims to the bankruptcy court made headlines there.

5. Companies allegedly owned by Dalmia have filed for bankruptcy in the US after failing to repay
$83 million raised abroad through BPO companies. The actions against Dalmia and the DSQ
group so far include the hefty Rs 630 crore penalty levied by Sebi along with a ban on Dalmia and
certain persons connected with DSQ Software and DSQ Holdings from accessing the capital
markets for 10 years.
In addition, Sebi has imposed a series of lesser penalties on a dozen investment companies
associated with Dalmia. The Enforcement Directorate (ED) too has imposed a penalty of Rs 64
crore on DSQ Software and another Rs 65 crore on its officials. ED has similarly imposed stiff
penalties on Dalmia and his associates in an associate listed company called DSQ Biotech,
which is similarly in the doldrums after several name changes.
THE UDAY GOYAL SCAM
MUMBAI, NOV 8: One more racket of setting up a dubious plantation company and
looting investors with promises of high returns has come to light with the arrest of Uday
Goyal, the managing director of Arrow Global Agrotech Ltd. early last week.
Goyal, who has been accused of duping his investors of over Rs 210 crore, was taken into
custody by the Borivli police after his application for anticipatory bail was rejected by
Additional Session Judge Abhay Thipsay.
The plantation scam came to light following a complaint filed by two investors. In their
complaint with the Borivli police, Chittar Singh, former general manager of Oil and
Natural Gas Commission and his advocate son Anant Singh claimed to have invested Rs
one lakh in Arrow Global lured by an assured return ranging between 24 to 10,000 per
cent in 21 schemes.
Singh, however, got wise to the scam when most of the 28 post-dated cheques Arrow
Global issued in his name bounced. When he tried to meet Goyal, the MD evaded him.
Meanwhile, Singh learntthat over 43,301 persons had invested in the schemes floated by
Arrow Global. When the hapless investors became aware of the scam, several criminal
complaints were lodged against the company with the Economic Offences Wing of the
crime branch, Thane crime branch, MIDC and Andheri police stations.
On October 16, the Borivli police arrested Rajesh Agarwal, the agent who had sold the
scheme to Singh. Anil Dalvi, one of the directors of Arrow Global, was also arrested.
While the duo's bail applications were rejected, another director Dinesh Arya was made
the prosecution witness.
Goyal had moved the sessions court for bail and the Bombay High Court for quashing the
first information report (FIR) filed against him at the Borivli police station. The high
court dismissed his plea. Rejecting Goyal's bail application, Judge Thipsay held that a
prima facie case of cheating existed against him as he had promised unrealistically high

6. returns to his investors. According to the Borivli police, the company directors andtheir
relatives had misused the investors' money to buy properties.
The Securities and Exchange Board of India had also filed a writ petition against the
company after the board received several complaints. The high court has now directed the
company to sell its properties and repay its investors. An inspection by the Registrar of
Companies had revealed that the Arrow Global had failed to file any documents since the
date of its incorporation in May 8, 1995.
Sanjay Agarwal remanded in bank scam
MUMBAI: A special court on Saturday granted bail to Sanjay Agarwal, CEO of broking
firm Home Trade and an accused in the Rs 92-crore Seamen's Provident Fund scam
because the Central Bureau of Investigation (CBI) failed to chargesheet him in 60-days as
required.
Offences punishable with less than 10 years imprisonment require that the chargesheet be
filed in 60 days. Later in the day, a metropolitan magistrate B.A. Shelar remanded him to
the custody of the economic offences wing of the Mumbai police until August 13 for his
alleged role in the Rs 5.4 crore Raghuwanshi bank scam.
Special Judge S.G. Deshmukh granted Agarwal bail on a personal bond of Rs 20 lakhs
and a surety of like amount. The CBI alleges that Home Trade never delivered
government securities worth Rs 92.78 crore belonging to 26,400 seamen and siphoned off
the money. The CBI had taken Agarwal's custody from the state crime investigation
department (CID) which is probing his role in the Rs 93 crore Nagpur District Central
Cooperative Bank (NDCCB) scam.
The CID alleges that Agarwal did not deliver government securities against this amount
to the NDCCB as promised. Agarwal had surrendered to a court in Nagpur on May 11
after the scam broke. Incidentally, NDCCB chairman and Nationalist Congress Party
leader, Sunil Kedar who was arrested in the case was on August 1 released on a personal
bond of Rs 1 lakh and two sureties of Rs 5 lakhs each because the CID, too, failed to
chargesheet him within 60 days.
Agarwal's defence lawyer Jaydeep Thakkar argued before Mr Shelar that his custody was
no longer needed because the investigation was over, the police had searched his
premises at Nariman Point and Vashi and sealed his 97 bank accounts. However, senior
inspector Rajan Katdare told the court that Agarwal's custodial interrogation was required
for information on the diverted funds and also on the role of three other accused in the
case who are yet to be arrested.

7. Rich List businessman Virendra Rastogi jailed for £350m
fraud
A chief executive who appeared on the Sunday Times Rich List
was jailed for a £350 million fraud uncovered after one of
his employees hit the wrong button on a fax machine.
By Richard Edwards, Crime Correspondent
Published: 5:45PM BST 05 Jun 2008
Virendra Rastogi, 39, Guantam Majumdar, 55, and Anand Jain 42 were found guilty of
an international conspiracy to defraud Photo: PA
Virendra Rastogi spent six years running an "incestuous empire" of fictitious firms whose
real premises included a cowshed in India and a launderette in America.
A judge said he caused banks on both sides of the Atlantic "enormous damage" by
tricking them into funding non-existent deals in "a crime of the utmost gravity".
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8. • Gazumped homeowner spared jail for estate agent smear
campaign
Rastogi's metal trading firm, RBG Resources, even duped Jack Cunningham, MP, Lord
Holme, Lord Woolmer and Lord Gray to become advisers to give it a veneer of
respectability.
The 39-year-old father of two lived a life of luxury at an exclusive Mayfair flat in central
London and was chauffeur driven everywhere. He earned £4.15million in just five years,
giving him a place on the Rich List as one of Britain's wealthiest Asian businessmen.
But after masterminding a highly sophisticated deceit it was a simple fax error - when a
company "flunky" sent the wrong documents from a fake office in Hong Kong - that
raised the suspicions of auditors and triggered the operation's downfall.
Investigators from the Serious Fraud Office later swooped on Rastogi's home in 2002 and
caught him frantically shredding documents.
After a massive investigation and trial - costing the taxpayer at least £10million - three
men were found guilty of an international conspiracy to defraud.
Judge James Wadsworth, QC, jailed Rastogi for nine and a half years at Southwark
Crown Court.
He told him: "Your brains made it as large as it became. Over the years the banks were
induced by your falsehoods to advance literally billions of dollars of trades that did not
exist in any real sense."
Co-conspirators Anand Jain, the "facilitator' of the fraud, was given an eight and a half
year sentence and Guantam Majumdar, once a respected banker in the City, was jailed for
seven and a half years.
The court heard that Rastogi, helped by his brother in America, set up an "empire of
imaginary metal", boasting a corporate address in Piccadilly, central London.
He ran a web of 324 "client companies", which were apparently ordering vast quantities
of metal through RBG from the USA, United Arab Emirates, Hong Kong and Singapore.
But the businesses, supposedly with multi-million pound turnovers, were simply "sham"
operations in small flats and shops with few assets beyond a table and chair. Investigators
were amazed to trace one to a cowshed in India, another a launderette in New Jersey,
while a third was the home of an elderly woman who sold scrapbooks.
Each "shell" trader had headed notepaper and company stamps and a complex paper trail
of bogus orders, deliveries and accounts was created.

9. The financial world increasingly saw RBG as a highly successful international metal
trader with an annual 1 billion dollar turnover - and it secured huge loans from creditors
at major, global financial institutions, such as German-based West LB and General
Motors.
Suspicion was averted by systematically clearing loans with even bigger borrowings.
Investigators found that, altogether banks, in America and the UK had been conned into
lending several billion dollars, although the "circular movement of monies" meant £343.5
million had actually disappeared. Much of it was laundered through Dubai and
Switzerland, with at least £40 million believed to have been sent to India. None of the
money has been recovered.
Rastogi convinced the financial world of his credibility by insisting on having
internationally renowned firm Pricewaterhouse Cooper as his auditors.
In 2002 a PwC auditor in Romania became suspicious when six documents - purporting
to be sent from six different companies all over the world - were all sent from the same
fax machine in Hong Kong. PwC resigned in the middle of the annual audit.
As Rastogi and others desperately tried to stave off disaster, workers were ordered into
the office for "file tidying" weekends and were issued with "pure theatre" scripts to learn
in case new auditors called. But it was too late; the massive charade had finally been
exposed and the Piccadilly-based trading giant was branded "rotten to the core".

10. The financial world increasingly saw RBG as a highly successful international metal
trader with an annual 1 billion dollar turnover - and it secured huge loans from creditors
at major, global financial institutions, such as German-based West LB and General
Motors.
Suspicion was averted by systematically clearing loans with even bigger borrowings.
Investigators found that, altogether banks, in America and the UK had been conned into
lending several billion dollars, although the "circular movement of monies" meant £343.5
million had actually disappeared. Much of it was laundered through Dubai and
Switzerland, with at least £40 million believed to have been sent to India. None of the
money has been recovered.
Rastogi convinced the financial world of his credibility by insisting on having
internationally renowned firm Pricewaterhouse Cooper as his auditors.
In 2002 a PwC auditor in Romania became suspicious when six documents - purporting
to be sent from six different companies all over the world - were all sent from the same
fax machine in Hong Kong. PwC resigned in the middle of the annual audit.
As Rastogi and others desperately tried to stave off disaster, workers were ordered into
the office for "file tidying" weekends and were issued with "pure theatre" scripts to learn
in case new auditors called. But it was too late; the massive charade had finally been
exposed and the Piccadilly-based trading giant was branded "rotten to the core".