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Home Trade scam: Sebi issues notices

Source: PTI
January 22, 2008 17:40 IST
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Market regulator Sebi on Tuesday posted on its website show cause notices to seven entities involved in the Home Trade Ltd securities scam.

The showcause notices were issued to Poddar Trading Company, Pacific Finance, Parakh Shares & Stock Broking, Subodh Bhandari, Sanjay Agarwal (prime accused in the case), Tellme.com and Maniram Consultants.

Sebi had to post the show cause notices on its website as the accused entities did not receive the notices sent to them earlier. The regulator has accused the entities of creating artificial volumes and manipulating the price of shares of Home Trade Ltd with a view to defrauding the banks and investors.

The regulator, while posting the show cause notices, also gave the opportunity to the accused to take advantage of the consent process in accordance with the guidelines issued by Sebi for obtaining consent orders.

The initial investigations, which started in 2002 from Pune and Bangalore found the promoters, directors and key officials of Home Trade involved in cornering over 95 per cent of the floating scrip of the company, the show cause notice said.

The manipulated scrips of the company were later used to secure loans from financial institutions resulting in loss of about Rs 80 crore (Rs 800 million) to eight cooperative banks.

The entities also indulged in off market transactions with a view to siphon money out of India, Sebi added.

Earlier, the company's CEO Sanjay Agarwal, the prime accused in the case was arrested in 2002 for his involvement in the scam, which resulted in huge losses to the cooperative banks.

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