Yes Bank staff accused of Rs 66L fraud

Partha Sinha, TNN Dec 29, 2009, 01.12am IST MUMBAI: A Gandhinagar court recently passed an order in a case of alleged forgery against an employee of Yes Bank who worked as a relationship manager in the bank's wealth management division. The court has ordered further investigation against the employee, Shruti Panchal, who allegedly forged the signature of one of its clients, prepared a duplicate company seal, changed bank mandates with forged signatures and the seal, and redeemed money invested in mutual funds worth about Rs 66 lakh, leading to a loss of about Rs 34 lakh to the client. The court has also ordered investigation on other unnamed bank officers since it appeared that the fraud was committed by Panchal with help from other people. The court's contention was that since people keep their money in banks, such cases can lead to loss of client confidence. The case relates to Gandhinagar-based MGD Electronics, whose MD, Rajesh Rathi, was approached by Panchal and her superior in 2007 to invest in mutual funds through the bank's wealth management services. The company invested a total of Rs 1 crore in four funds in December 2007.

SEBI uncovers scam in YES Bank IPO allotment Bans 13 investors from trading Our Bureau
Mumbai, Dec. 15 THE capital market regulator, SEBI, has unearthed a large-scale multiple application case in the recent YES Bank IPO and banned 13 investors from trading in the bank's shares with immediate effect. These investors have manipulated allotment of shares by opening more than 7,500 `benami' depository accounts. They gained Rs 1.7 crore by this manipulation on the first trading day of the IPO, according to a SEBI interim order issued today. SEBI has also referred the case to the Reserve Bank of India seeking investigation into the role of the Chennai-based Bharat Overseas Bank Ltd and Vijaya Bank in opening the bank accounts of these benami entities and funding their IPO applications. The modus operandi According to SEBI report, an investor named Ms Roopalben Panchal had applied for 1,050 YES Bank shares and paid the application money of Rs 47,250. Apparently she did not receive any allotment. Later she received 150 shares each from 6,315 allottees through off-market transfer. Thus, she received 9,47,250 shares in aggregate, which she sold through five other entities on the day of listing.

Another investor, Sugandh Estates and Investments P Ltd, also received a large number of shares by similar method of manipulation and gained about Rs 32 lakh through opening 1,315 benami accounts. Investigation by SEBI has found depository participant, Karvy-DP, which was used by these companies to open 7,630 benami dematerialised accounts (which served as a conduit for two entities) failing in the `know your client' norms in the issue. SEBI has asked NSDL to undertake comprehensive inspection of Karvy-DP to check whether it has implemented the `know your client' norms that DPs are required to follow. Further probe needed SEBI said: "Further probe is required for examining the systemic fault, if any, of the registrar to the issue - Karvy Computer Shares Pvt Ltd - and the lead mangers, DSP Merrill Lynch Ltd. And Enam Financial Consultants in identifying and the weeding out the benami applications." NSDL and Central Depository Services Ltd have also been advised by SEBI to enhance their surveillance and devise and put in place systems and procedures for identifying multiple dematerialised accounts of suspicious nature. Both the depositories have also been asked to report their findings to SEBI "as expeditiously as possible," according to SEBI order by its whole-time member, Mr G. Anantharaman. The 13 entities and individuals barred from further dealings in YES Bank and future IPOs are Ms Roopalben Nareshbhai Panchal, Ms Devangi Dipakbhai Panchal, Seer Finlease (P) Ltd, Excell Multitech Ltd, Zenet Software Ltd, Tauras Infosys Ltd, Mr Rajan Vasudev Dapki, Barghav Panchal (HUF), Mr Jayantilal Jitmal, Sugandh Estates and Investments Pvt Ltd, Sujal Leasing, Ms Ritaben R. Thakkar, and Mr Veenben Y. Thakkar.