"The large purchases of scrips on two or more days from the same brokers at the same rate shows possible pre-arranged purchases rather than at the prevailing market price on that day," said the investigation report.

According to the report in possession with The Financial Express, shares of some companies were purchased and sold to brokers for different rates on the same day. "Nine thousand shares of SBI were sold at Rs 294 to CK Tibrawalla & Co on June 20, 1996. The same day, about 8,000 shares of the bank were sold to the same broker at Rs 291.90 when the bhav copy was quoting a minimum price of Rs 294.75 and a maximum price of Rs 304.25," it said.

The report stated that a handful of scrips purchased between April1995 and June 1996 "did not move" in the market at all, raising suspicion of a nexus between brokers and management. According to the report, about 150,000 shares of ATV Projects were purchased on July 19, 1995, at Rs 35.50 from Jayesh D Parekh. The next day, about 350,000 shares of the same company were bought at the same rate from the same broker.

In another instance, BOI AMC bought 95,000 shares of Coats Viyella from KB Shah at Rs 137 on August 31. The very next day (September 1), the AMC again bought 25,000 shares of the company from the same broker at the same rate.

Likewise, BOI AMC bought 250,000 shares of Kushiram Biharilal Ltd from Sanjay Sanghvi in a span of two days at Rs 58.58 and 400,000 shares of Premier Polyfilon Ltd from Yogesh Mehta at Rs 25.26. It also bought 300,000 shares of Rajesh Exports Ltd from Sailesh H Doshi in two days at Rs 130.

"The purchases made in these scrips amount to investments beyond the delegated authority in a single scrip per day," the report pointed out.

In afew cases, investment decisions made by the managing director also exceeded the overall limit fixed by the AMC for investments in the secondary market. For instance, 50,000 shares of Asian Paints were bought on October 13, 1995, at a cost of Rs 3.25 crore as against the limit of Rs 2.5 crore. About 65,000 shares of Bank of Rajasthan were bought between August and September 1995 at Rs 2.21 crore against the prescribed limit of Rs 1.5 crore.

According to the report, the purchase of a large quantity of shares either on an offer basis or through market deals, found to have been made from a few brokers (except a few A group shares), indicate that investments were made without any scientific study of company's fundamentals.

Clarifying on the issue, BOI AMC managing director KN Khanna told The Financial Express: "Nobody can predict the movements of equity prices in the market. It is said in the stock markets that after any decision is made it can always be challenged, as the forces governing equity pricemovements are beyond control and unpredictable. At that point of time investment decisions were made according to the market conditions prevalent at that point of time. We have come across cases in other mutual funds where share prices have fallen sharply, giving a big blow to the returns generated by the fund."

The report further stated that a majority of scrips purchased during 1995-96 were on an offer basis in B-2 groups having low trading volumes. "The purchase of such shares in bulk in a short span from a few select brokers may also be considered as speculative transactions," said the report.

The report also states that dividends aggregating to Rs 7.9 lakh and Rs 7.6 lakh were short received during 1994-95 and 1995-96 for the Rs 53-crore Boinanza Equity-linked Saving on Tax (BEST) Scheme '93.