As investigations continue in the bribe-for-credit scam, some self-styled boutique investment banks have come under scanner for colluding with promoters of debt-laden listed companies to abuse regulatory loopholes to raise funds through various debt and convertible instruments.
In the case involving PSU lender Syndicate Bank's now-suspended CMD S K Jain, Altius Finserv's Pawan Bansal has already been booked by the CBI along with others for allegedly acting as a key middleman.
Bansal, a chartered accountant who has formerly worked with some big private sector banks, had set up Altius as a "full-fledged financial service provider" to provide investment banking, debt syndication and capital markets activities among others.
According to senior officials, some other such entities have come under the scanner of regulatory agencies, including banking regulator RBI and capital markets watchdog Sebi, for acting as 'conduits' between debt-laden companies and lenders, which include public sector banks and other financial institutions, while propagating as 'investment banks'.
The role of promoters of at least ten such companies are also under scanner, as these are suspected to have violated various provisions of listing norms. Interestingly, these companies have already faced action by the stock market authorities for different reasons in the past one year.
Bansal was arrested by CBI earlier this month in connection with the case involving Jain, who was allegedly taking bribes for increasing credit limit of some companies in violation of banking rules.
Altius is registered with Sebi as a market intermediary in different segments and it was formerly known as Upvan Securities Pvt Ltd.
While the company's website went down soon after Bansal's arrest, it earlier claimed to offer credit solutions and capital market services to corporate clients, equity broking for HNIs and retail individuals, and 'inter-bank' dealings to banks, financial institutions and insurers.
Officials said that the entities, with whose promoters such 'boutique investment banks' have colluded to arrange funds in violations of banking and capital market norms, include an NCR-based real estate group, a luxury hotel chain operator and an old industrial house.
Others to have dealt through these 'investment banks' include a well-known NBFC, a textile firm, a telecom player, a steel and power conglomerate, an urban infrastructure project firm, as also a diversified group with presence in manufacturing, real estate, infrastructure and engineering.
These 'conduits' are suspected to have influenced the decisions at banks and other financial institutions by paying bribes to their senior officials.
As some entities on whose behalf such funds were being arranged happen to be listed companies, the regulators are also looking into possible violation of capital market norms.
Besides, it is also being probed whether such 'investment banks' and 'advisors' were following the prescribed norms for such capital markets-related activities.
