CBI starts probe into IPO scam

Searches on in Delhi, Mumbai, Ahmedabad.

The Central Bureau of Investigation today conducted searches at 21 premises of bank managers and brokers in three cities, including the National Capital Region, in connection with the Infrastructure Development Finance Corporation and Yes Bank IPO scam which resulted in a loss of Rs 32 crore to the exchequer.

The searches came after a case was registered by the Bank Fraud and Securities Cell of the CBI following a complaint by the Securities and Exchange Board of India, CBI sources said here today.

The searches were being conducted at 15 places in Ahmedabad, five places in Mumbai and one in Delhi. Under the CBI scanner are certain individuals, bank managers and lead managers.

Two cases were registered against Roopalben Nareshbhai Panchal and Deepak Panchal, directors of Sugandh Estates and Investments Pvt Ltd, some executives of Bharat Overseas Bank Ltd and Vijaya Bank.

The CBI alleged that these people connived to corner the shares of the IDFC and Yes Bank worth Rs 32 crore through illegal means. Finance Minister P Chidambaram, in the Lok Sabha last week, had promised action against those allegedly involved in the scam.

All agencies of the government, including the Reserve Bank of India, Sebi and the Central Board of Direct Taxes, had been activated and "severest action" would be taken against those accused, Chidambaram had warned adding, while interim action had already been taken and responsibilities fixed against the accused, there would be more action in the coming days.

Among the places searched by the CBI were that of applicants, managers of several bank branches, brokers and depository partners.

Sebi also banned four investors, in whose names the multiple accounts were opened, "" Roopalben Nareshbhai Panchal, who was also named in the Yes Bank scam, Sugandh Estates and Investments, Purshottam Ghanshyam Budhwani and Manojdev Seksaria "" from transacting in the securities market, till further directions.

Besides these four, Sebi had also barred another 35 firms from participating in IPOs in the future, till further orders.

Sebi has referred the Yes Bank case to the RBI, seeking investigation into the role of Chennai-based Bharat Overseas Bank and Vijaya Bank in opening bank accounts of benami entities and funding their IPO applications.