The CBI?s Economic Offences Wing is investigating the block deals by LIC, involving at least seven of the beneficiary companies named in the FIR of the multi-crore housing loan scam. The deals involved corporates like Amtek Auto, Mundra Port and Special Economic Zones, Wellspun and Adani. The CBI has calculated the total fraud size at Rs 1,380 crore. Apart from the CBI, Sebi is also investigating the matter, since it suspects that share prices of these companies were rigged by leaking of price-sensitive information.

The size of the Mundra deals, involving three entities, amounted to Rs 450 crore. Adani Enterprises? transaction by two entities amounted to Rs 550 crore. Welspun?s block deal amounted to Rs 161 crore, a source investigating the block deals, said. Amtek?s deal was worth Rs 75 crore. These deals were carried out in connivance with executives of public sector banks in order to talk up the value of their shares, said an official in the EOW investigating the matter. All these block deals took place between April and May, 2010.

A block deal is a single transaction of a share lot of 5 lakh shares or of Rs 5 crore, said an expert. This was perhaps the modus operandi employed by the suspects, CBI officials said. The planning about block investment made by LIC in the particular stock would be leaked by LIC officials to Rajesh Sharma of Money Matters (India).

The investment plans of the companies are meant to be kept secret, as they involve the company?s strategic investment of the shareholder?s money. Some of the key LIC officials who were in close contact with Sharma, would then selectively pass on this price-sensitive information to other market participants.

As the news of LIC, the single-largest insurance company, investing in these firms reached the market, the value of their shares would increase, leading to huge profits in the stock market. The CBI now has enough proof to back its claims.

The EOW officers who are investigating the case said that Money Matters India has been acting as a mediator and facilitator for corporate loans. They would allegedly bribe the top officials of public sector banks and financial institutions for facilitating large-scale corporate loans. This was apparently done in order to get the loans passed, even when the corporates seeking such loans were not eligible for it.

However, finance ministry officials had on Friday said LIC Housing Finance, whose CEO R R Nair was arrested, had an exposure of Rs 388 crore to the eight real estate companies being probed by CBI ? which is 0.9% of its total loan book of Rs 43,300 crore at the end of September 2010. Of this, an exposure of Rs 180 crore was to DB Realty, which is being investigated separately in the 2G scam. LIC, the country?s largest insurance company, had an exposure of around Rs 1,300 crore to real estate firms.

Bank of India, whose general manager RN Tayal was among those arrested by the CBI on Wednesday, has an exposure of Rs 646 crore to three companies, which are among the 21 under the scanner. This includes BGR Energy (Rs 470 crore), Ashapura (Rs 126 crore) and OPG (Rs 50 crore).

UPDATE: Mr Rajesh Sharma,  Accused in Spl Case CBI Nos: 9/11, 65/11, 66/11, 71/11 & 72/11 has informed that he was discharged from prosecution commenced under provisions of the IPC and Prevention of Corruption Act, 1988 in all these cases by Orders passed by HHJ Sp Judge Mr A A Khan (CR 47) on 17.06.2015.