6 Brokers Booked For CSE Payment Default

Kolkata, September 25: | Updated: Sep 26 2002, 05:30am hrs
Six leading brokers of Calcutta Stock Exchange (CSE) were arrested for their alleged role in the payment crisis at the bourse nearly one and half years ago, which led to the crash of exchanges across the country. The brokers-Harish Chandra Biyani, Ramesh Chandra Biyani, Raj Kumar Jain, Gopal Singhania, Vijay Singhania and Basudeo Singhania - were arrested from their residences in different parts of the metropolis on Tuesday night by sleuths of the detective department of Kolkata Police.

The brokers were charged with indulging in circular trading and violating CSE regulations.

The six were produced before the chief metropolitan magistrate SC Mishra on Wednesday, who remanded them to police custody till October four.

The public prosecutor said the accused had not only violated the Calcutta Stock Exchange conditions on payment of margin and security money, but also involved in circular trading to inflate prices of shares to defraud the public to the tune of Rs 120 crore.

The arrests followed the CSE obtaining a decree from the Calcutta High Court for recovering Rs 5.82 crore from DK Singhania and the filing of three civil suits and a number of other cases under the Negotiable Instruments Act against brokers for bounced cheques, as part of its initiatives to recover funds.

The brokers were initially involved in default of payment of nearly Rs 150 crore in March 2001, which led to the crash in all major exchanges of the country. The public prosecutor also told the court that the brokers tried to cheat the exchange which led to the payment crisis.

They masterminded a scheme to cheat the CSE as the cheques paid by them towards margin payment were returned dishonoured in March, 2001 in connection with settlement numbers 148 and 149, he said.

Arguing on behalf of the brokers, the defence lawyer said that the accused had already proposed to the CSE on March 22, 2001 to repay all dues, and despite this were being charged with circular trading.