The Central Bureau of Investigation (CBI) is in the final stage of compiling evidence against the Lucknow-based Johari brothers of Century Consultants fame, and is set to nail them for misappropriation of public funds, cheating, forgery and conspiracy in a scam allegedly involving over Rs 200 crore.
"The documents pertaining to the case run into over 5 lakh pages. We are carefully going through them and collecting evidence. The chargesheet is being processed by the legal cell at the CBI headquarters and is expected to be filed soon," an official close to the investigation said.
The two brothers have allegedly duped about 11,000 investors from whom funds were collected to be deployed under Bombay Stock Exchange's vyaj badla scheme (which has since been discontinued).
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The funds were used to jack up the prices of Cyberspace shares, he said. Cyberspace, a software services company, has been in the midst of a controversy over private placement of 3.45 lakh shares at Rs 930 per share with the Unit Trust of India in July 2000.
The Rs 32.8 crore raised from this deal was diverted by the Joharis to a clutch of shell companies against the stated purpose of deployment.
Another case pertains to the 'Century Secured Bonds' which the company had floated in 1997. The bonds were supposed to have been issued against secured assets.
The company forged documents to show that it possessed assets against which it was taking the deposits.
Having raised money through the bonds, the company has not redeemed them upon maturity. The promoters ripped investors to the tune of Rs 70 crore raised through Century secured bonds, the official said.
The Joharis, who have been under judicial remand since May 22, floated as many as 24 companies, several of which were not even registered.
All these companies had their close confidantes as directors and were used to mop up funds from investors.
The brothers even floated a bank, City Cooperative Bank, in 1994, and ensured that their cronies were on the board.
Using their proximity to the board of the bank, the Joharis helped themselves to unsecured loans and the amount was invariably siphoned off, the official said, adding that the bank even discounted their cheques, which later bounced due to lack of funds.