MUMBAI, June 9: Justice S N Variava of the special court, adjudicating the securities scam, will give his order on the application of Bhupen Dalal, a notified party, on Monday. Dalal is seeking the court's directives to ask the Central Bureau of Investigation (CBI) to probe certain aspects of the scam, including some transactions entered into by the Standard Chartered Bank (Stanchart).Dalal has alleged that the bank recorded bogus and sham transactions which are not reflected in the books and records of the Bank of Karad. According to him, the investigative agency has not compared these entries.
If proper investigation is made, the entire basis of Stanchart's complaint would be destroyed and could be ascertained from the records of the bank itself, states the application.
Replying to this allegation, Stanchart counsel K G Menon cited the transaction of the bank on March 30, 1990, involving purchase of securities worth Rs 335 crore (Rs 95.50 per security). Menon admitted to the court that the bank didnot pay the full amount to purchase these securities but made a profit by selling them to other parties. According to him, securities worth Rs 250 crore and Rs 85 crore were sold to HongkongBank and Credit Lyonnais respectively at Rs 104.50 per security.
During the course of the hearing, Justice Variava remarked: "The agency ignored the aspect that without possession of the securities, the bank was selling them at an assured rate of interest of 15 per cent".
Answering the submission of Menon (who was relying on a Supreme Court judgment) that Justice Variava, in his capacity as a special court judge, cannot order re-investigation into a case where cognisance of the offence is already taken, Dalal told the court that the judge had ordered re-investigation in the same case in 1995 when CBI wanted to acquit VC Desai, TB Ruia and Hemant Vyas from the allegations levelled against them.
Citing the minutes of a meeting of Stanchart personnel on February 20, 1990, Dalal said that PS Nat (a senior officer ofStanchart) has admitted to have lent Rs 200 crore to Hiten Dalal. He also cited details of transactions annexed to the minutes of the meetings.
This proves that the higher-ups in the bank were not only aware of the deals but were also directly in touch with Hiten Dalal, he added. He also referred to the Janakiraman Committee report, which states that the cash corporate deployment scheme (CCDS) of Stanchart was only a facade for taking deposits from the customers at a rate of interest which was higher than that approved by the Reserve Bank of India.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
