डीओडी और आईसीएआई ने सीए एचआर कंचन पर लगाया प्रतिबंध, 50 हजार का जुर्माना

·   सीए ने चार दशक पुरानी कंपनी ही लूट ली

·   एक निदेशक से मिल कर की कंपनी की चोरी

·   दस्तावेजों में फर्जी दस्तखत करके हथियाई कंपनी

·   सीए और निदेशक ने करोड़ों की कंपनी कर ली हड़प

·   प्रबंध निदेशक की सालों की मेहनत मिल गई मिट्टी में

·   1998 से चल रहा था कंपनी हथियाने का यह काला खेल

·   मुंबई पुलिस की अपराध शाखा में चल रही है कंपनी चोरी की जांच

·   सीएमडी ओके ऑगस्टी को हुआ एक हजार करोड़ से अधिक का नुकसान

मुंबई। ओएफएस इंडस्ट्रीज प्रा. लिमिटेड नामक कंपनी के साथ जालसाजी और उसके कारोबारी हितों के खिलाफ काम करने के आरोप में सीए की सूची से चार्टर्ड अकाऊंटेंट हरीश रामप्पा कंचन की सदस्यता रद्द करने की सजा डायरेक्टरेट ऑफ डिसिप्लीन (डीओडी) / द इंस्टीट्यूट ऑफ चार्टर्ड अकाऊंटेंट्स ऑफ इंडिया (आईसीएआई) ने सुनाई है। आईसीएआई के इतिहास में यह पहला मौका है, जब ऐसा कठोर दंड किसी सीए को डीओडी जैसे शीर्ष संस्थान के चार वरिष्ठ पैनलिस्ट ने मिल कर सुनाया है।

चार्टर्ड अकाऊंटेंट हरीश रामप्पा कंचन को कंपनी हड़पने के लिए निदेशक ओके वर्गीज के साथ मिल कर साजिश रचने और व्यावसायिक दुराचरण का दोषी पाते हुए द इंस्टीट्यूट ऑफ चार्टर्ड अकाऊंटेंट्स ऑफ इंडिया (आईसीएआई) और अनुशासन निदेशालय (डीओडी) ने छह माह के लिए सीए की सूची से चार्टर्ड अकाऊंटेंट हरीश रामप्पा कंचन की सदस्यता (क्रमांक 036608) व नाम रद्द करने और 50 हजार रुपए का जुर्माना अदा करने की सजा सुनाई थी।

आदेश के साथ आरोपी सीए हरीश रामप्पा कंचन को भेजे पत्र (क्र. पीआर/02/08/डीडी/29/2008/डीसी/53/09) पर डीओडी के सहायक सचिव शशी महाजन के हस्ताक्षर हैं।

डीओडी के आदेश (क्र. डीडी/29/2008/डीसी/53/09) में कहा है, “आरोपी के काम से यह जाहिर होता है कि उसने चार्टर्ड अकाऊंटेंट्स के लिए तय मानकों के विपरित कार्य किया है और इससे चार्टर्ड अकाऊंटेंट्स के प्रति आस्था तोड़ी है। यह भी कहा जा सकता है कि चार्टर्ड अकाऊंटेंट्स व्यवसाय के लिए बदनामीकारक कार्य किया है।” इस आदेश पर प्रिसाईडिंग ऑफीसर जी. रामास्वामी, सरकारी नामिनी एसके घोष, कमेटी सदस्य नीलेश एस. विकमसे और सुमंत्र घोष के हस्ताक्षर हैं। इसमें कहा गया है, “डीओडी की राय में एचआर कंचन को चार्टर्ड अकाऊंटेंट्स एक्ट, 1949 की धारा 2 के भाग चार की पहले अनुदेश, धारा 7 व 8 के भाग एक के दूसरे अनुदेश के तहत व्यावसायिक दुराचरण का दोषी पाया जाता है।”

आईसीएआई ने सजा के आदेश में कहा है, “इस मामले में मौखिक और दस्तावेजी सबूत देखने के बाद यह सामने आया है कि आरोपी ने हद गंभीर व्यावसायिक गड़बड़ियां की हैं। कमेटी को लगता है कि आरोपी को इस मामले में कठोर सजा दी जानी चाहिए।”

आईसीआईए के आदेश में साफ तौर पर लिखा है, “चार्टर्ड अकाऊंटेंट्स एक्ट (अमेंडमेंडेट), 1949 की धारा 21(बी)(3) के तहत अनुशासन समिती ने 50 हजार रुपए का नकद जुर्माना 30 दिनों के अंदर जमा करने और छह माह तक सीए की सूची से नाम निकाल देने की सजा सुनाई है।” इस आदेश पर प्रिसाईडिंग ऑफीसर मनोज फडनीस, सरकारी नामिनी एसपीएस नागर और जोगिंदर सिंह के हस्ताक्षर हैं।

इस मामले में शिकायतकर्ता श्री ऑगस्टी के मुताबिक उनकी 45 सालों की मेहनत पर कुछ लोगों के लालच ने पानी फेर दिया। इस हरकत के कारण वे इस कदर टूट गए कि अब तक कोई कारोबार करने की स्थिति में नहीं रह गए हैं। बरसों तक चले कानूनी मुकदमेबाजी और पुलिस व डीओडी के चक्कर डाटने के कारण वे न केवल आर्थिक रूप से खस्ताहाल हो गए बल्कि आर्थिक रूप से भी बुरी तरह टूट गए हैं। श्री ऑगस्टी कहते हैं कि इस धोखाधड़ी के कारण कंपनी को 200 करोड़ रुपए से अधिक की संपत्तियों व कारोबार का सीधे नुकसान हुआ है। कंचन और वर्गीज द्वारा कंपनी हड़पने के कारण कारोबार न कर पाने की स्थिति में उन्हें एक हजार करोड़ रुपए से भी अधिक का नुकसान पिछले कुछ सालों में हुआ है।

श्री ऑगस्टी ने सीए कंचन और कंपनी के निदेशक ओके वर्गी पर आरोप लगाया कि इन्होंने मिल कर उनके साथ न केवल धोखाधड़ी की बल्कि जाली हस्ताक्षर किए, नकली दस्तावेज बनाए, शेयर हड़पे, कंपनी की 200 करोड़ रुपए से अधिक की रकम हजम की थी। इसके कारण न केवल हमें आर्थिक नुकसान हुआ बल्कि सामाजिक एवं पारिवारिक रूप से भी भारी नुकसान हुआ।

श्री ऑगस्टी ने यह भी बताया इस मामले की जांच मुंबई पुलिस की अपराध शाखा द्वारा की जा रही है। इस बारे में एक शिकायत पहले ही पुलिस के पास दर्ज की जा चुकी है।

अधिक जानकारी के लिए संपर्क:

ओके ऑगस्टी,

सीएमडी, ओएफएस इंडस्ट्रीज प्रा. लि., मुंबई

+91 9870 55 66 99

दस्तावेज की डिजीटल प्रतियां हासिल करने के लिए देखें - www.mininewswire.com

DOD & ICAI Suspends and Fines CA For Cheating, Fraud And Forgery

CA conspired with the director of his client’s company and attempted to take illegal possession of the same

Mumbai: In probably first such order, the Directorate of Discipline (DOD) / Institute of Chartered Accountants of India (ICAI) has ordered the removal of the registration of a chartered accountant (CA) on charges of alleged fraud and for working against the interest of a company.

Four senior panelists of DOD passed the order against CA Harish Ramappa Kanchan for allegedly working against OFS Industries Private Ltd., owned by OK Augusty. Kanchan was accused of conspiring with a director of the company OK Varghese to take illegal possession of the company. DOD and ICAI suspended Kanchan’s membership (no 036608) for six months from the list of CAs. He was also directed to pay a fine of Rs 50,000 in cash.

DOD Order number DD/29/2008/DC/53/2009 also says, “The conduct of the Respondent in this matter is unbecoming of a Chartered Accountant as he failed to bestow the faith reposed by the Society in the Chartered Accountants. Further, the said conduct of the Respondent has brought disrepute to the profession of Chartered Accountancy.”

Punishment Order from ICAI reads, “Keeping in view the facts and circumstances of the case as aforesaid, the material on record and also the oral / written representations of the Respondents and the very serious nature of professional misconduct, the Committee is of the view that the interest of justice would be met if only a severe punishment is awarded to the Respondent.”

The punishment order of ICAI says, “Fined for Rs 50,000 in cash  to be paid in 30 days and name to be suspended from CA’s list for six months under section 21(B)(3) of the Chartered Accountants Act (Amended) 1949.” The letter (no. PR/02/08/DD/29/2008/DC/53/09), sent to Kanchan with the order, bore signature of assistant secretary, DOD, Shashi Mahajan.

The order of the DOD has signature of Presiding Officer G. Ramaswamy, Government Nominee Sk Ghosh, members Nilesh S. Vikamsey and Sumantra Guha. The order found Kanchan guilty under many sections of the Chartered Accountants Act 1949 & the Chartered Accountants (Amendment) Act 2006.

The punishment order has signature of Presiding Officer Manoj Phadnis, Government Nominee SPS Nagar and Joginder Singh. The order found Kanchan guilty under section 2 of the Chartered Accountants Act 1949 & the Chartered Accountants (Amendment) Act 2006.

According to Augusty, the fraud, conspiracy of which started way back in 1998, has brought him to shambles as he lost crores worth property and business due to the long legal battle when he was also forced to made several rounds of the police department and DOD. The fraud also caused a loss of over Rs 1,000 crores to him in last few years, he said.

Augusty alleged that Kanchan and Varghese not only cheated him by using forged signatures, fabricated documents but also usurped his shares and over Rs 200 crores of the company. Due to this shocking misadventure by Kanchan and Varghese, we had not only loss in monetary term but irreparable loss and damage to the legacy of the family.

Augusty also informed that this case is being investigated by the Mumbai police crime branch, as we lodged a complaint against all accused.

For more details contact:
OK Augusty,
CMD, OFS Industries Pvt. Ltd., Mumbai
+91 9870 55 66 99

Digital Copy of the documents available at www.mininewswire.com

Chop hands of forgers, says HC judge

CHENNAI: It is unfortunate that the country does not have laws to chop off hands and fingers of fraudsters who forge property documents, the Madras high court lamented on Thursday. Justice S Vaidhyanathan, refusing to order release of property documents registered on the basis of forged papers, also imposed a fine of 1 lakh on the person who committed the fraud.

"In Islamic countries, horrifying punishment of cutting hands and chopping off fingers for even petty thefts is implemented. I came across an article that said Iran has unveiled its latest innovation in criminal punishment - a machine that cuts off fingers of thieves. It is being used for cutting off the fingers of culprits by a court in Shiraz. For forgery, this court is of the view that such a stringent punishment of chopping off fingers should be awarded to the petitioner," the judge said.

"Unfortunately, in our country there is no stringent law to cut off the hands of persons who indulge in fabricating documents. If laws are rigid and deterrent, criminals will not dare to indulge in illegal activities like the case on hand, wherein officials of a sub-registrar office were hand in glove with criminals to help them usurp and loot the properties of innocents," he said.

Citing the Quran, the judge said theft was 'haraam'. "The Prophet cursed the thief because he is a corrupt element in society, and if he is left unpunished, his corruption will spread and infect the body of the ummah (nation)," he said.

The matter relates to a petition filed by P M Elavarasan, seeking to direct the Saidapet district registrar and Virugambakkam sub-registrar to assign a registration number to his property and release the documents. The authorities withheld the documents after realising that the property belonged to V V V Nachiappan's family and the land documents had been forged by Elavarasan. His counsel, however, argued that the registering authorities did not have the power to probe ownership and title of the property and that they are obliged to return registered documents.

Justice Vaidhyanathan, rejecting the demand, said it was a clear attempt to grab land and expressed shock that such fraud took place with the connivance of officials in the registration department. Upholding the decision to withhold the documents, the judge said Elavarasan had the temerity to approach the court for a favourable order despite having perpetrated forgery and fraud. The court then imposed 1 lakh cost on Elavarasan and directed him to pay 25,000 each to four service organisations, including the Adyar Cancer Institute, within a month.

Noting that the court could not remain a silent spectator, the judge said it would deal with such people with an iron hand. He then expressed hope that authorities and the court concerned would initiate criminal proceedings against Elavarasan for his illegal activities and award maximum sentence after a speedy trial.
Courtesy:
A Subramani,TNN | Jul 11, 2014, 12.45 AM IST
http://timesofindia.indiatimes.com/City/Chennai/Chop-hands-of-forgers-says-HC-judge/articleshow/38155113.cms

M-Sat finds Satyam fraud began in 2002

The multi-thousand-crore-rupees accounting fraud at the erstwhile Satyam Computer Services Ltd by its ex- chairman B. Ramalinga Raju dated back to 2002, much further back than earlier thought.

Investigations carried out by Mahindra Satyam (M-Sat), which took over Satyam Computer Services Ltd in April, 2009, revealed this fact.

The investigating team noted that there were certain transactions which were either improperly recorded or remain unrecorded. There was no proper information about fictitious transactions to the tune of Rs 1,122 crore prior to 2002, as a result of which it was shown as net opening balance as on April 1, 2002. It was classified as " unexplained differences suspense account," in the assets and liabilities statement.

The fraud committed by Satyam's founder and ex- chairman B. Ramalinga Raju and his team was exposed in the restated audit report of M- Sat for the years 2008- 09 and 2009- 10, which was approved by the board of directors of the company on Wednesday.

An independent forensic team appointed by the new management had to struggle a lot to unearth the fraud. " It was the most challenging task. The forensic team had to do 100 types of investigations, go through 2,70,000 files running into 30 terabytes, decode the secret data gathered from 300 hard disks seized from the erstwhile promoters, study one billion lines of secret transactions and examine 200 bank accounts to dig out the scam," M- Sat chairman Vineet Nayyar said.

These include fictitious accounts in revenue receipts, interest income, exchange fluctuations, salary, other expenses, bank borrowings and interest, and tax payments. The total extent of fraudulent entries had an impact of Rs 6,800 crore on the profit and loss account of M- Sat.

For instance, the fictitious revenue from April, 2002, to September, 2008, was Rs 5,353 crore, generated by creating 7,500 inflated invoices and circumventing the normal revenue recognition cycle. This was followed by showing fictitious cash collections as collections from customers. In order to substantiate these fictitious collections, forged bank statements and fixed deposit ( FD) receipts were also prepared.

Of the total fictitious revenue shown, about Rs 4,870 crore was translated into fictitious cash and bank balances. Similarly, fictitious interest income recorded from 2002 to 2008 was Rs 899 crore, of which Rs 327 crore was translated into fictitious cash and another Rs 197 crore was recorded as withholding tax on such interest income.

The remaining Rs 375 crore was reflected as accrued interest as on September 30, 2008.

The forensic investigation also exposed the record of Rs 206 crore towards fictitious exchange gains, which resulted in fictitious debtors of Rs 18 crore and balances of Rs 188 crore. It revealed that Raju had knocked away Rs 293 crore as net salary costs, which were not recorded in the books of accounts, resulting in fictitious cash and bank balances of Rs 299 crore.

What is more, during the scam period, Raju and his team had borrowed Rs 720 crore from banks, but there are no loan records. The company had effected unrecorded repayments to the extent of Rs 581 crore. The unrecorded interest expenses in respect of such accounts amounting to Rs 17.5 crore also resulted in fictitious cash and bank balances.

"The promoters showed fictitious tax payments ( advance tax and US federal tax) to the tune of Rs 306 crore. We have also noticed some entries and debits which we are unable to explain as they remain unidentified," Nayyar said.

The investigation has been unable to identity the nature of certain alleged transactions amounting to Rs 1,203 crore against which the firm had received notices from 37 firms.
Courtesy:
Srinivasa Rao 
Hyderabad   
Last Updated: October 4, 2010  | 17:47 IST

http://businesstoday.intoday.in/story/m-sat-finds-satyam-fraud-began-in-2002/1/9290.html

Online racket busted: 4,500 duped of Rs. 11 cr

The police here on Saturday nabbed a fraudster who had alle gedly duped 4,500 people across the country to the tune of Rs. 11 crore. The accused was active in Chandigarh and its adjoining areas and he had set up his offices also.

The police claimed that he was involved in an online fraud and made Rs. 11 crore within six months by cheating people.

The accused has been identified as Shyam Prasad, a resident of Andhra Pradesh. The police have arrested his three other partners but have not disclosed the names of other gang members.

He had registered a website “Helping us.me”. He had advertised through inter net and allured the people by giving assurances that the money would be doubled within 40 days.

He used to show the doubled amount in some of the accounts. The gang members were trying to misguide the people by claiming that they were able to double the money within 40 days.

By this method, they were able to make 4500 members within India who were deceived. Police officials are taking the assistance of bank officials for tracing the account numbers.

They are also getting assistance from the cyber cell to trace other gang members. The police arrested him on the charges of cheating and various sections of the IT Act.

Courtesy:
Gurpreet Singh Chhina, Hindustan Times  Fategarh Sahib, May 25, 2014
First Published: 10:12 IST(25/5/2014) | Last Updated: 10:14 IST(25/5/2014)
http://www.hindustantimes.com/punjab/patiala/online-racket-busted-4-500-duped-of-rs-11-cr/article1-1222606.aspx

Indian American ordered to pay $683 mn for bank fraud

New York : Anil Anand, former chief financial officer of Allied Deals Inc, was sentenced to the time served - seven months in prison - and ordered to forfeit $600 million and pay restitution of $683.6 million on charges of his involvement in a massive metals trading fraud that cost international banks at least $600 million.

Anand, 46, of New Jersey, pleaded guilty to five counts, including conspiracy and bank fraud, in December 2002 and agreed to cooperate with the government.

He testified in 2004 in New York against six co-defendants and in London in 2007 at the trial of Virendra Rastogi, who controlled Allied Deals with his brother Narendra and three others.

His sentence, which otherwise would have been up to 30 years, was reduced by the Manhattan federal court because of his cooperation with investigators.

Anand admitted participating in the Ponzi scheme by inducing banks to issue hundreds of millions of dollars in loans.

They posed as metals brokers to secure loans from a wide range of US and international banks, including FleetBoston Financial, PNC Financial Services Group, J.P. Morgan Chase and Dresdner Bank.

Hundreds of metal transactions upon which the loans were based simply did not exist.

Anand, the Rastogi brothers, and their co-conspirators had set up an elaborate network of hundreds of sham, nominee companies around the world - which they called "group companies" - to serve as dummy buyers of metal from Allied Deals so that the defendants could get loans from the victim banks.

The conspirators used loan proceeds from one victim bank to make the loan payments required by another victim bank.

Fifteen people were arrested in the US in connection with the fraud. Nine, including Anand, pleaded guilty; five were found guilty at trial; and one was acquitted. Two defendants in the US case have not been apprehended.
Courtesy:
Submitted by Anonymous on 19 June 2008 - 10:37pm
By IANS,
http://twocircles.net/2008jun19/indian_american_ordered_pay_683_mn_bank_fraud.html

Ponzi pension scheme and pious fraud

TMC MP Kunal Gosh’s arrest perhaps has refreshed your memory of the horrific Saradha scam. If not, let me remind you. Saradha group of companies looted thousands of crores of rupees from the poor people of the states of West Bengal and Assam. It is alleged that West Bengal Chief Minister Mamata Banerjee was fully aware of the detailed functioning of the company and her party was getting maximum benefits from the satellite television channels and newspaper owned by the company. Kunal Gosh claimed that those media houses were working under the direct instructions of TMC. In fact Mr. Gosh claimed that he was compelled to sack one of his editors to satisfy Didi! Same things happened in Assam. Saradha CMD Sudipta Sen himself alleged that a powerful minister of Gogoi cabinet, top cop of the police administration, journalists and even so called artists were benefitted out of his fraudulent company.

Saradha was not the only company to loot the hard earn money of the poor investors of the state. There were many other ponzi companies like ABYSS, Ramel etc etc. We also noticed the operation of the fraudulent pyramid companies like Unipay2You, Royal Forex, Sambav etc in Assam. Those companies also looted thousands of crores. Some of the perpetrators were booked and many got spared.

Another such possible threat of pyramid scheme is going to be exposed through this article. It may be shocking for you to know that this time government welfare scheme National Pension System (NPS) is going to be used as a tool to fool the poor people of the state by some pyramid fraudsters.

National Pension Scheme is a social security scheme by government of India. It is meant to provide a secure retirement life to the citizen of the country keeping in mind the inflation, rising cost of living as well as increased life expectancy. Swavalamban Yojana is designed for the workers of unorganized sector under NPS. It is expected that the scheme will benefit the poor workers to great extend. Under this scheme if the subscriber pays a minimum yearly contribution of Rs. 1000 and maximum Rs. 12000; government will contribution another one thousand to their pension account i.e. Permanent Retirement Account Number (PRAN). This scheme will continue to till FY 2016-17 and may be extended also. No doubt it’s a very good scheme for the poor unorganized workers.

Now let’s see how the pyramid fraudsters are planning to the fool those poor unorganised workers. In the first week of this month (Nov’2013), an NGO is registered under the Societies Registration Act 1860. The organization has designed such a plan that you even can’t raise question to their noble (?) initiative! They will organize awareness camps to promote Swavalamban Pension Scheme (PRAN CARD). To get involved with the campaign you need to donate only Rs. 500/-. Yes! This is not a big deal. In fact they will be helping the poor to get their legitimate entitlements! But they have different plan to benefit you as well. What is the actual plan?

The subscriber needs to pay Rs. 500/- and the organization will liaison with the Point of Presence (PoP) to open his/her NPS account. Pension Fund Regulatory and Development Authority (PFRDA) have identified 58 PoPs all over the country. PoPs are basically banks (both PSU and private), private financial institutions and Department of Posts. The next move is very interesting. The subscriber will be qualified for an income as soon as he adds three subscribers (A, B and C) in his immediate downline and A and C again add three subscribers each as their immediate downline. The first subscriber (Top of the pyramid ToP) will get a bonus of Rs. 200/-.

Now calculate the total amount received by the organization. The organization had added 13 NPS subscribers so far and had collected Rs. 6500/- from the bottom of the pyramid (BoP). The organization will be incurring the expenses Rs. 1300/- for their PRAN card and Rs. 200/- as bonus to the ToP. Thus their net profit is going to be approx Rs. 5000/- from the one single ToP!

Remember if the ToP somehow fails to add a single subscriber he/she will not be eligible to get the bonus amount of Rs. 200/-.

The organization has also a very lucrative award and reward plan. If there is a 100 pairs of countable (A and C only constitutes countable pair, B is not countable!) subscribers, the ToP subscriber will get a tab and if there is 25000 such pairs under the ToP, he will get a Skoda car!

Let us make it easy to guess the total benefit of the pyramid organization from such single ToP subscriber 25000x3x400=30000000. Yes, you are not mistaken; the fraudster can earn a hefty amount of approx Rs. 3 crores! So, giving a skoda car as incentive is not a big deal! We shouldn’t forget that the huge income of the fraudster is nothing other than the great loss to the poor people of the state.

Now let’s examine why such scheme is viable to operate in Assam only. The reason behind the rise of ponzi schemes like Saradha, Jeevan Suraksha, Ramel etc is same with the case of this pyramid schemes. Lack of financial literacy, financial inclusion and the anti-poor attitude of the formal financial system are the major reason behind this menace. Financial literacy is a must to protect the financial vulnerability of the poor of the state. Moreover, the status of financial inclusion is worse in Assam. Business Correspondent model ‘Swabhiman’ has become a liability for the banks. At the same time the 58 PoPs identified by Pension Fund Regulatory and Development Authority (PFRDA) are not poor friendly. The fraudsters can read the weakness of the financial system in Assam and they are making cash on it.

This fraud scheme is reaching the interior parts of the state like wildfire. Districts like Barpeta, Nagaon, Dhubri etc are more prone. In fact a huge network has already been built within a couple of days. Some of the subscribers are even thinking that this is the only way to get the PRAN card!

The fear is not only to lose the Rs. 500 alone, but to lose the entire life savings of the poor unorganized workers. Our fear is based on some crucial documents. We have accessed some documents which clearly indicate that even some of the government machinery is also involved in this fraud campaign. We are not disclosing those documents here to help the administration to nab the fraudsters.

We hope, government will wake up and take action against those pious frauds.
Courtesy:
Submitted by admin4 on 30 November 2013 - 10:48am
By Abdul Kalam Azad,
(Abdul Kalam Azad is a Post Graduate student at Tata Institute of Social Sciences.)
http://twocircles.net/2013nov30/ponzi_pension_scheme_and_pious_fraud.html

Real estate firm's MD held for fraud

NEW DELHI: The managing director and proprietor of a real estate company, allegedly involved in cheating more than 5000 people through a pre-launch scheme, was arrested by the crime branch of Delhi Police from Mumbai on Monday. Accused D K Aggarwal (47) had been declared proclaimed offender by the Delhi High Court and carried a reward of Rs 50,000 for his arrest in 13 cases of cheating and forgery.

CA Aggarwal had been absconding after the fraud came to light last year. He floated a company called Laxmi Vatika Limited with its office in Connaught Place. Soon afterwards the company offered pre-launch options in various housing projects at Dehradun, Mumbai, Mohali and Patna.

Aggarwal, who once worked with the JVG Group, a company involved in a Rs 172 crore scam in 2000, adopted a different modus operandi this time. He issued advertisements promising a high quality of life in the proposed townships. The investors were assured that the company had the required land, licence and registration certificate.

"In reality, the company had no land, licence or papers and all the promises were false to cheat gullible investors. No permission was sought by the company from the concerned authorities for setting up of the proposed townships and the company had no authority to collect money from the investors," said joint commissioner of police (crime and railways) Alok Verma.

Meanwhile, the company collected money for the projects from investors in the range of Rs 51,000 to Rs 7 lakh but made no allotments. Aggarwal then disappeared, prompting investors to sue him and his company. While on the run, he used 33 SIM cards to avoid being caught.

The police kept track of Aggarwal's movements, and the cases against his company were transferred to the EOW of Delhi Police. Local intelligence revealed that he moved to Mumbai where he lived in different houses and hotels.

The police traced the accused car with its Delhi registration number in Mumbai and he was arrested there.
Courtesy:
TNN Sep 10, 2008, 02.40am IST
http://articles.timesofindia.indiatimes.com/2008-09-10/delhi/27909897_1_delhi-police-sim-cards-crime-branch

BIDDING ‘TWEAKED’ : Goa highway repair tenders cancelled : Plea Filed In High Court Alleges Fraud

Mumbai: The state government cancelled two tenders, worth Rs 13 crore, awarded recently for road repairs on the Mumbai-Goa highway after a petition filed in the Bombay high court (HC) alleged fraud and nexus in the bidding process.

The state assured the court on Monday that it had decided to invite fresh bids after a division bench made its intention clear that it would pass interim orders in the petition, which alleged that P S Mandpe, chief engineer (national highway), public works department, had tweaked conditions in the bidding to favour the successful bidder.

Manisha Constructions, from Ratnagiri which has been undertaking highway projects for almost three decades and was one of the bidders, moved the HC to expose the alleged nexus between the chief engineer and the winning bidder, Dayanand Pote, also from Ratnagiri. The state had issued tenders in December 2012 for repairs along 26 km in two stretches between Panvel-Mahad and Panjim on the highway.

Advocate Naveen Chomal, the petitioner’s counsel, submitted in court that Mandpe lowered the eligibility criteria, postponed submission dates and bypassed the crucial document scrutiny process, which helped Pote. The petition said Mandpe opened the bid documents (technical and financial) in his office in Navi Mumbai, instead of letting the executive engineer to do
it, as required, in Ratnagiri. The petition challenged Mandpe’s January 31, 2013 order to an executive engineer to allot work to Pote.

The petition also alleged that Pote had submitted forged documents to claim eligibility when it had hardly any experience in undertaking such projects. Senior counsel S G Aney, who appeared for Pote, argued that the documents were “uploaded by mistake’’ and said that since Pote had completed work worth Rs 60 lakh, he should be allowed to complete it “in public interest’’.
Courtesy:
Swati Deshpande TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/04/24&PageLabel=7&EntityId=Ar00701&ViewMode=HTML

Sebi stumbles upon new way of duping investors

Mumbai: Market regulator Sebi, with the help of Delhi Police, on Tuesday got wind of a new way of defrauding investors that the regulator believes could be widespread and cautioned investors to be on guard.

The regulator recently received a complaint that some unknown persons, claiming to be agents and brokers of mutual funds and insurance companies, had contacted an investor and said that the deceased son of the investor had invested in mutual funds which were to mature soon. Those agents said that to get the full amount from the fund house, the investor should issue a cheque in advance for a new mutual fund scheme or an insurance policy, failing which the complainant will lose a substantial portion of the maturity amount as broker commission, a Sebi release said. The regulator did neither disclose the identity of the investor nor the agents involved.

According to the release, the agents said the investor could get Rs 5 lakh if he/she did not make a further investment of Rs 2.5 lakh. However, if the investor did make the investment, he/she will receive Rs 12.5 lakh as the maturity amount.

On receiving the complaint, a Sebi team conducted a preliminary investigation and found that the phone numbers from which the agent had called were in some other name and also the name of the company as disclosed by the agent was different from the name with which the phone number was registered.

“Sensing a clear attempt to defraud, cheat and misappropriate as well as mis-sell financial products, Sebi deputed an official to visit the complainant at the time of the visit of the agent,” the release said. It also sought the assistance of the economic offences wing of Delhi Police. “On perusal of the forms and after preliminary enquiries, the suspicions were confirmed that indeed there was an organized attempt by several people to defraud and mis-sell,” Sebi said. Subsequently, an FIR was being lodged with Delhi Police.

Sebi now suspects that the number of victims of such fraudulent attempts could be much higher.

To prevent such frauds in future, Sebi has cautioned investors that they should verify the credentials of people approaching them as agents or employees of mutual funds and insurance companies before making any investment through such people.

MODUS OPERANDI
•Some persons claiming to be agents of MFs and insurance companies approached an investor claiming his/ her late son had invested in MFs that were to mature soon
•They told the investor that to get the full amount, the investor should write a cheque in advance to invest in an MF scheme or an insurance scheme, or he/she would lose a substantial sum as broker fees
•The investor wisely chose to inform Sebi, which found that it was a bid to dupe investors
Courtesy:
TIMES NEWS NETWORK
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/04/10&PageLabel=24&EntityId=Ar02402&ViewMode=HTML

HSBC: How Simple Became Complicated, and costly

HSBC-SETTLEMENT-COMPLEX-FINE:HSBC: How Simple Became Complicated, and costly

HSBC takes its name from its roots as the Hongkong and Shanghai Banking Corporation, but there has long been a joke inside and outside the firm that the name stands for "How Simple Became Complicated".

That complexity in part explains how the London-based bank ended up with the biggest fine ever imposed on a financial firm by U.S. regulators on Tuesday - an eye-watering $1.9 billion - after a lengthy U.S. probe showed sweeping problems at the bank. Lax controls had left HSBC as the "preferred financial institution" for drug traffickers and money launderers, U.S. prosecutors said this week.

The concern is that HSBC, Europe's biggest bank, with more than 60 million customers across 84 countries, is unable to adequately monitor all its operations, a task made harder by its history of patchwork acquisitions.

HSBC said it has spent hundreds of millions of dollars to bolster compliance and simplify its control structure to address the lapses in anti-money-laundering controls, mainly in its Mexico and U.S. operations, which led to stinging criticism from politicians and the record punishment.

"(Chief Executive) Stuart Gulliver is doing a good job looking after the group, but at the end of the day it is an absolutely massive bank with branches everywhere; it is impossible to guarantee that there isn't something going on somewhere," said Jane Coffey, head of equities at Royal London Asset Management, an HSBC shareholder.

Gulliver restructured HSBC shortly after taking over at the start of 2011, setting up global businesses and functions to improve communication and operations across the group.

In the past, national heads ran all its businesses within each country, which could result in problems going unnoticed. The bank needed to improve its internal sharing of information to help cut down on illicit activity, U.S. Senator Carl Levin said when he published a scathing report on the bank in July.

In Mexico, where HSBC became one of the top banks with the 2002 purchase of Grupo Financiero Bital, a rapid expansion meant problems were missed. Between 2007 and 2008, HSBC's Mexican operations moved $7 billion into the bank's U.S. operations, and both Mexican and U.S. authorities warned the bank the amount of money could only have been so high if it was tied to illegal narcotics proceeds, the U.S. Senate report said.

In early 2008, a Mexican drug lord referred to the bank as the "place to launder money", U.S. prosecutors said this week.

TALL TASK
Unlike the Libor interest-rate rigging scandal that rocked UK rival Barclays this summer and forced its chairman and chief executive to quit, HSBC's fine has not prompted calls for senior management to step down.

Stephen Green, who was chief executive and then chairman from June 2003 until December 2010, is now UK Trade Minister and has faced calls to explain what he knew. He said in July he shared the "regrets" HSBC had about the failings. Michael Geoghegan was CEO from May 2006 until the end of 2010, and has not taken on any major new role.

Critics say the failures highlighted this week show the scale of the task facing Gulliver; he has simultaneously to improve returns for investors, meet tougher global regulations, cut costs and stay on top of potential problems.

For some, it is evidence that banks should be prevented from becoming too big, especially as HSBC didn't live up to earlier promises to change.

Back in 2003 New York regulators cracked the whip on HSBC Bank USA, ordering it to do a better job of policing itself for suspicious money flows.

The bank promptly hired a tough federal prosecutor to oversee anti-money-laundering efforts and installed monitoring systems for operations that had grown unwieldy during its big U.S. expansion. But in confidential documents that originate from investigations of HSBC's U.S. operations by two U.S. attorneys' offices there are allegations that from 2005 HSBC was not adequately reviewing hundreds of billions in transactions.

When the Senate issued its 400-plus-page report about how HSBC's lax controls had left it as a financier to clients in areas tied to drug cartels, terrorist funding and tax cheats, it accused the bank of having a "pervasively polluted" culture for a long time.

Gulliver said in a statement after Tuesday's fine: "The HSBC of today is a fundamentally different organisation from the one that made those mistakes."

Cormac Leech, banks analyst for Liberum Capital, said he thought HSBC had done enough to assure investors that it had dealt with its regulatory issues, pointing to its commitments to spend more on processes and better monitoring initiatives.

Compliance costs in North America increased by about $200 million in the first nine months of this year, and a review of customer files will cost about $700 million in the next five years. Gulliver has recruited senior former U.S. compliance experts to lead its efforts.

His attempts to streamline the bank and improve compliance is part of a wider three-year turnaround effort that has seen him sell dozens of businesses and target $3.5 billion in annual cost cuts. He is coming to the end of the second year.

"More could be done (to speed up change), but I think a lot has been done. HSBC was probably more at the incompetent rather than immoral end of the spectrum," said one of the bank's biggest 25 investors, who asked not to be named.

"It's like changing the civil service, changing HSBC. It's such a large organisation. I think there will be large parts of the group which are quite resistant," he said.

HSBC remains, however, a strong favourite with analysts. Of 33 covering the stock, 22 rate it a "buy", eight have a "hold" rating and just three consider it a "sell", according to Reuters data.

"I think a private client can be reasonably confident that the HSBC dividend is sustainable, that they have good management in place and that the bank is not unduly exposed to high-risk areas," said Algernon Percy, head of private clients and manager of the JO Hambro Investment Management Portfolio Fund and an HSBC shareholder.

Courtesy:
© Thomson Reuters 2012
Reuters / London Dec 12, 2012, 18:43 IST
http://www.business-standard.com/india/news/hsbc-how-simple-became-complicatedcostly/199288/on

Duty Evasion Scam: Six firms guilty of export fraud fined 148 crore

Mumbai: The Customs department recently imposed a collective fine of Rs 148 crore on six companies, four central excise employees and a chartered accountant in a case involving fraudulent claim of export incentives. The department has also sought Rs 44 crore for evasion of duty.

A government scheme allowed companies to import raw materials duty-free, provided they export the finished goods. In this case, Shalimar Rexine imported raw material without paying any duty for manufacturing PVC leather, but sold it in the market here.

Additional commissioner of customs Nasim Arshi, in his adjudication order, said, “Supreme Rexine Industries Ltd, Sunrise Exim and Supreme Import and Export were inter-related firms formed with the aim to import raw material by availing exemption from duty and then exporting cheaper quality of PVC leather cloth. This was re-imported and again exported to show artificial discharge of export obligation.’’

Afzal Khan, Yunus Khan, Firoz Khan, directors or owners of Supreme Rexine, Sunrise Exim and Crescent Overseas, plotted the entire fraudulent operation to hoodwink the department of Rs 220 crore.

The case dates back to September 2005, when Customs officials at Nhava Sheva examined Shalimar Rexine’s export consignment and found difference in the weight of the PVC leather cloth. Customs investigations found that Supreme re-imported some of the consignments sent to Dubai and abandoned them after the investigations started. It was also found that Dubai port authorities had blacklisted Shalimar Rexine and auctioned some of the consignments.

Firoz Khan created Crescent to facilitate some of the re-imports which were exported, the adjudication order said. Sunrise was also created as part of the modus operandi. Customs also imposed a fine on three other companies who participated in the fraud.

All those who were found guilty denied the charges before Nasim Arshi. The officials were fined Rs 50,000 each for not following due diligence in the clearance of goods. The Khans and the three companies where they had interests were collectively fined Rs 147 crore. Chartered Accountant Lalit Thakkar was fined Rs 10 lakh. He was fined for issuing certificates confirming export figures which were not genuine. Shalimar Rexine had admitted to Rs 30 crore liability before the settlement commission but did not pay up, officials said.

Courtesy:
C Unnikrishnan TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2012/10/01&PageLabel=4&EntityId=Ar00402&ViewMode=HTML