NEW DELHI, May 30: While admitting that the total liabilities of CRB Capital Markets could well be in the region of Rs 800 crore, senior finance ministry officals indicated that neither of the two regulators, RBI or SEBI, would be held responsible as part of the problem lay in grey areas in the law.

It was also made clear that unless some other company agrees to take over CRB, investors are likely to have to face a long wait before they get any of their money back though the official liquidator will approach the courts on Monday to unlock CRB's offices across the country, the actual process of liquidation can take years.

According to the latest balance sheet of CRB Caps which is available with the RBI, the company had a net worth of Rs 436 crore on March 31, 1996. Assuming that assets were correctly stated here - by no means a certainty - this means that the group's liabilities exceed assets by Rs 400 crore. Officials also clarified that there was no question of any deposit insurance for investors in non-bank finance companies (NBFCs).

Earlier in the day, CBI director Joginder Singh, put the figure of CRB's liabilities at Rs 1,000 crore, taking the asset-liability mismatch to Rs 600 crore. As per the CBI estimates, the CRB group's liabilities include Rs 133 crore to banks, Rs 6 crore to Unit Trust of India (UTI), Rs 120 crore to co-operative socities in Gujarat, Rs 100 crore to corporates (borrowed as inter-corporate deposits), Rs 229 crore through CRB mutual fund, Rs 186 crore to individual depositors and Rs 257.99 crore raised through public issue of equities.

Of liabilities to banks, the group owes Rs 57 crore to the State Bank of India (SBI) alone. Other banks include IndusInd Bank Rs 20-21 crore, Bank of Baroda and several co-operative banks. Singh told reporters that a committee had been formed, comprising officials from CBI, RBI, SEBI and the Maharashtra police to co-ordinate investigations into the scandal.

Singh said that the investigations will be co-ordinated by CBI Deputy Inspector-General Anup Patnaik. Explaining the functioning of the committee, Singh said there is more than one angle to be probed in the scam. There is also the need to maintain liaison between various government departments like Income Tax to break the truth, added Singh.``The Interpol has been tipped, but dealing with international agencies is a two-way traffic. One has to take into consideration the legal systems in both the countries before any extradition can really take place,'' remarked Singh.

While SBI is still in the process of completing its investigations , it is believed that CRB chief Bhansali may have used forged warrants to withdraw funds from SBI. Under an agreement with the SBI, dividend warrants issued by his company were to be honoured by every SBI branch, provided CRB deposited these funds with SBI's head office prior to this.

Bhansali approached the SBI and promised to deposit the funds in March this year, while claiming that there might be a slight mismatch of inflows and outflows. In the event, according to ministry officials, he took advantage of the communication lag between various branches and withdrew close to Rs 58 crore before anyone got wise to his act.

While admitting that the entire episode showed that there was little co-ordination between the two regulators (RBI and SEBI), ministry officials were at pains to point out that the problem was really one of grey areas in the law. So while SEBI was in charge of monitoring the merchant banking arm of CRB Caps, the NBFC activities remained unregulated.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.