Tatas Allege Pendse Used TFL Funds For Personal Trading

Mumbai, November 17: | Updated: Nov 18 2002, 05:30am hrs
Tata Finance Ltd (TFL) in its civil case rejoinder has alleged that former TFL managing director Dilip Pendse along with other accused, used the funds of TFL to fund their personal trading. The Tatas have also alleged that Mr Pendse and others purported to foist their personal trading losses onto TFLs subsidiaries.

The rejoinder expressed apprehension that with the related parties not possessing the funds to participate in such high volume trading, even margin money for these transactions had been taken from TFL through inter-corporate deposits (ICDs). TFL has given an example of the above suspected transactions stating, During the period April 1, 2000 to March 31, 2001 IECIL (a subsidiary of TFL) advanced, inter-alia, from out of ICDs obtained from the plaintiff (TFL), a sum of Rs 1.36 crore to defendant No.14 (Malini Sanghvi Securities) as an interest free ad-hoc margin money, where there was no need for such margin money/advances to be made by IECIL.

According to the rejoinder, these surplus interest free advances were used to fund and secure personal trading by Mr Pendse, friends, family and associates. The rejoinder further states that though such excess margin money amounts were subsequently repaid or adjusted against further trades by the brokers, TFL suffered a loss of Rs 1.03 crore by way of interest loss on such payments. The Tatas have therefore alleged that Mr Pendse be held liable for the loss.

The rejoinder further adds that all fraudulent trading, manipulation and antedating of trading records was carried out by brokers other than Tata TD Waterhouse. The circumstances that the alleged large trades on which these subsidiaries suffered losses were carried out for no apparent discernible reason (i.e. the trading losses being deliberately inflicted upon Inshaallah and Niskalp), the rejoinder states. Both companies are subsidiaries of TFL. The rejoinder further adds, the fact that such alleged trades were purported to be carried out on Form B - i.e. with the brokers on their account and not through the exchange. Stating that such transactions were illegal, the rejoinder said that the alleged trades of Niskalp, Inshaallah and IECIL were so structured by Mr Pendse, acting in concert with other defendants ( Anjali Beke, Anuradha Pendse, Nalini Pendse, Jhunjhunwala Stock Brokers amongst others), as a means of transferring to them the personal trading losses incurred by the above named.