CRB investors to finally see closure

Delhi HC sets up panel to sell holdings of Arihant Mangal scheme, settle claims in a year

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Twenty years after they bought units of the doomed Arihant Mangal Scheme, investors in the CRB Mutual Fund can finally hope to get back some of their money. The high court here has set up a three-member committee with a year’s term, chaired by retired district judge S K Tandon,with wide powers to ensure termination of the scheme and repayment to unit holders.

In 1994, CRB MF, promoted by Chain Roop Bansali, had floated the scheme and raised about Rs 230 crore from thousands of investors. Bhansali, a chartered accountant, had built an empire that included a merchant bank and a non-banking finance corporation (NBFC) in quick time. With the meteoric rise came allegations of dubious financial dealings and money laundering.

After getting reports of financial irregularities by CRB Capital Markets Ltd, the NBFC, the Securities and Exchange Board of India (Sebi) asked the trustees of CRB MF for a report on what they’d done to protect the interests of their unitholders. As no response was received and some trustees had resigned by then, Sebi, in the interest of the unitholders, issued an order dated May 21, 1997, directing the custodian of CRB not to dispose of the securities held by it till further orders.

Also in the same year, it petitioned the high court in Mumbai. In January 1999, the HC approved repayment up to 300 units at a net asset value (NAV) of Rs 4.95 to each holder having up to 10,000 units. As the directors and board of trustees were reluctant to take charge of the scheme, an official administrator was appointed, who dispatched refund warrants to a section of investors. However, the scheme went into limbo with the demise of the administrator, M L T Fernandes, in February 2012. Then, both Sebi and CRB had suggested the forming of a panel to wind up the scheme.

The panel, under ex-judge Tandon, would have the power to “dispose off all the securities of Arihant Mangal Scheme...and all other securities, wherever they may be; and to distribute the sale proceeds thereof to all the unitholders at the NAV”, which it is to ascertain, the court has said.

Former Sebi executive director S C Das and M D Kanther, a member suggested by the counsel for CRB, are to be the other panel members. Unlike the official administrator who was based in Mumbai, the new panel will work out of Delhi.