Financial Daily from THE HINDU group of publications
Friday, Oct 04, 2002
Markets - Economic Offences
Info-Tech - Software
Warrant sought to arrest DSQ promoter
KOLKATA, Oct. 3
THE Kolkata police have for the first time said they have decided to seek arrest warrants for Mr Dinesh Dalmia, promoter of the DSQ group of companies, in connection with the alleged siphoning out of funds from the Calcutta Stock Exchange. The move comes on a day which saw the arrest of Mr Dinesh Jain, Managing Director of Srei International Securities Ltd.
In his briefing to the media, Mr Soumen Mitra, Deputy Commissioner (Detective Department), said the Kolkata police had moved the Chief Metropolitan Magistrate's court for issuing warrants against Mr Dalmia and Mr Dinesh Kumar Singhania, the former head of CSE, whose group is among the three that allegedly masterminded the fund diversion. Both of them are absconding.
Mr Dinesh Jain was picked up on Wednesday night from his residence for alleged involvement in the case. His complicity has been established from the documents seized earlier by the police. On Thursday, he was produced in the court and remanded to a day's police custody.
While it is "too early to say this company too was involved in illegal badla financing", Mr Jain was known to have been involved in such financing, Mr Mitra said. Srei offices would further be searched by the police.
Mr Hemant Kanoria, Director of Srei International Finance (the promoter company), criticised the police action. "Mr Jain is not involved. The police went to talk to his brother, who is a broker, and by mistake they picked him up," he said.
However, Mr Sunil Kanoria (also on the Srei board) said: "I am not aware of the CSE dealings. To the best of my knowledge we were mainly handling Government securities."
Srei International Securities, it may be mentioned, operated in the wholesale debt segment of the National Stock Exchange. Mr Jain was earlier the ED of the company and was only recently elevated to the post of MD.
Mr Mitra also said the Kolkata police would get in touch with their counterparts in Chennai for Mr Dinesh Dalmia. Though he originated from the city, he moved over to Chennai about five years back.
"There used to be three groups of brokers headed by Messrs Dinesh Singhania, Ashok Poddar and Harish Biyani. They were involved in badla financing, circular trading and similar sorts of activities. In fact, they played the leading role," Mr Mitra said.
The DSQ group of companies, comprising mainly DSQ Software, DSQ Industries and DSQ Biotech, has been the centre of investigations initiated earlier by the Securities and Exchange Board of India and more lately by the Stock Holding Corporation of India Ltd. Last July, SEBI had even prohibited DSQ Software from accessing the capital markets for a critical period.
In another significant development, the Mumbai Police landed in Kolkata to interrogate the arrested brokers of Calcutta Stock Exchange. These brokers were likely to be taken over to Mumbai but, as Mr Mitra said, only after the Kolkata police were through with their probe.
"The Mumbai Police would interrogate them for alleged involvement with Ketan Parekh in the Bombay Stock Exchange crisis."
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