Police dig up fake stamp papers in CSE case

The investigation in the Calcutta Stock Exchange (CSE) payment crisis took an unexpected turn today with police detectives unearthing evidence indicating use of fake stamp papers, thrown up by the Telgi scam.

This is for the second time that the ambit of the investigation has been widened beyond the affairs of stock markets.

Earlier, Kolkata Police, the investigating agency, had unearthed documents that revealed siphoning off funds outside the country through hawala route violating the Foreign Exchange Management Act (FEMA).

The link with the Telgi affair emerged when sleuths intercepted some e-mails sent to the Stock Holding Corporation of India (SHCIL) city office from its headquarters in Mumbai, asking the local office to accommodate stockbroker Harish Chander Biyani as "empanelled client" to legitimise the transactions.

SHCIL provided Rs 67 crore to two entities of Biyani- Biyani Securities and Biyani himself- in three tranches the first week of March through its two schemes. Both the Biyani entities were not empanelled for these schemes, a pre-requisite for such a service.

The Mumbai-headquarters of SHCIL sent over a dozen e-mails asking the local office to empanel Biyani as a client much after he was provided with funds. A back-dated agreement between SHCIL and Biyani was allegedly executed using fake stamp paper.

The revelation, which indicated nexus between the Biyani and the top brass of SHCIL, was in stark contrast to the findings of Sebi. In May 2003, the market regulator gave a clean chit to SHCIL saying Biyani cheated facilities offered by SHCIL.

Former SHCIL chairman B V Goud was arrested by Kolkata Police in late 2001 and imprisoned for 90 days. Biyani met the same fate along with some other defaulting brokers and their associates led by Dinesh Kumar Singhania and Ashok Kumar Poddar.

Kolkata Police has also been on the lookout for the DSQ group chief Dinesh Dalmia as the two schemes of SHCIL, through which funds were provided to Biyani, witnessed selling and buying of the stock of DSQ Industries.

In addition, DSQ Software, another Dalmia firm, issued preferential shares to CSE for listing which, on investigation, were found to be invalid. A case relating to the arrest of Dalmia would be heard by the Supreme Court next week.