CALCUTTA, June 17: The custodian appointed by the special court in connection with the 1992 securities scam on Tuesday notified 11 firms, mostly belonging to prominent Delhi broker Naresh Aggarwala, a former officer of ANZ Grindlays Bank. Market sources said Aggarwala had strong links with major scam players such as the Harshad Mehta group, Hiten Dalal, Abhay D Narottam, TB Ruia and Fairgrowth Financial.

The exact amount involved would be known only after a thorough probe into all transactions entered into by these parties between April 1, 1991, and June 6, 1992.

Custodian B Bhattacharya has notified these parties "on information received that the persons/entities had been involved in offences relating to transactions in securities after April 1, 1991, and on and before June 6, 1992" in exercise of his powers vested in him by section 3(2) of the Special Court (TORTS), Act 1992.

Leading marketmen expressed surprise at the fresh set of notifications issued five years after the scam broke out in mid-1992. This could have a dampening effect on an already shaky market, they said.

A dealer with a leading institutional brokerage firm said the uncertainties created by the notification would force foreign institutional investors, non-resident Indians and overseas corporate bodies to review their investment strategies in India. He added that fear of further notifications would shake the confidence of investors in the paper-based system.

The order of the custodian states: "All properties, movable or immovable or both, belonging to the persons/entities notified herein, shall stand simultaneously attached by virtue of the provisions of section 3(3) of the Special Court (Trial of Offences Relating to Transactions in Securities) Act,1992."

The parties notified are Naresh K Aggarwala, Naresh K Aggarwala & Co, Preeti Aggarwala (a member of the Bombay Stock Exchange), Brisk Capital Market Services (member of the National Stock Exchange), Brisk Financial Consultant, Brisk Exports, Brisk International, PEENA Investments, International Portfolios, Savasthi Investments, S Ramaswamy, proprietor of Excel & Co of Mumbai and one-time associate of Bhupen Dalal.

The custodian confirmed the order and said: "Only those assets, movable or immovable including shares and securities, which have not been transferred to third parties and which stand in the name of the notified parties till date, will be attached. Shares and securities already transferred will be outside the purview of the notification."

A prominent broker of the Calcutta Stock Exchange felt that the notification will also put the spotlight on all those who had business links with Naresh Aggarwala.

Sources clarified that the custodian can exercise his powers under section 4(1) of the Special Court (TORTS) Act, 1992, and cancel any transaction entered into by the notified parties between April 1, 1991, and June 6, 1992, if he is satisfied with the report submitted by the investigating authorities that there were "major irregularities" in the deals.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.