CSE scam kingpin Dinesh Dalmia held

Kolkata police on Monday arrested Dinesh Dalmiya of DSQ group, the prime accused in the Calcutta Stock Exchange (CSE) share scam, which came to light in 2001. The arrest comes nearly three years after a formal FIR was lodged.

A Kolkata police team brought Dalmiya from Chennai on Monday morning, and produced him in the court of the chief metropolitan magistrate (CMM) at 2 pm, which rejected Dalmiya's bail plea.

The FIRs were filed by the CSE and Stock Holding Corporation in 2002, at the Hare Street and Park Street police stations respectively. CSE's filed the FIR against Dalmiya for alleged siphoning of funds through issue of fake shares between March and April 2001.

DSQ group allegedly issued duplicate fake shares of DSQ Softwares and DSQ Industries through stockbroker Harish Biyani and his associates.

"Around 10 lakh fake shares was issued. The value of those shares was close to Rs 20 crore at price of Rs 180-200 per share, the market price then," sources in CSE said.

It was also alleged that Dalmiya helped in artificial price rigging in stocks like DSQ Software, DSQ Industries and Global Software.

Public prosecutor A Bakshi demanded 15 day police custody for Dalmiya, saying that though CBI had arrested Dalmiya on February 27, that arrest was in connection with another case.

"According to CBI the alleged fraud perpetrated to DSQ was to the tune of Rs 630 crore, but Kolkata Police has brought him here in a separate case," he added.

Dalmiya's lawyer, Bishnu Ghosh, pleaded that Dalmiya be granted bail or at least jail custody as he has already been in police custody for the last 14 days, since his arrest by CBI.

The prosecution opposed the bail move citing Dalmiya has already taken seven anticipatory bails from Chennai High Court in the last three years. "He even violated a High Court order by going abroad while in bail," Bakshi said.