Ketan Sheth, one of the key faces of the co-operative banks' gilts scam, wooed bank officials in three avatars over the past five years, according to a complaint filed by the Navsari Peoples' Co-operative Bank Ltd (NPCBL).
These were as the owner of Ketan Sheth & Co in 1997, as the top man of Euro Asian Securities Ltd in 1999, as a director of Giltedge in the same year, and, in early 2000, as the director of Home Trade Ltd.
A complaint filed by NPCBL, which lost Rs 24.76 crore in the scam, with the state Economic Offences Cell here, reveals that Sheth was well-known in the co-operative bank circles of Gujarat since the last five years.
In 1997, Sheth had approached a few co-operative banks in the state, including NPCBL and made a presentation that he was owner of Ketan Sheth & Co, and dealing into sale and purchase of government securities for and on behalf of various clients including co-operative banks.
To prove his credentials, he also had shown documents related to his transaction with few co-operative banks in Gujarat and Maharashtra and impressed his preys in Gujarat.
"We thereafter discused terms and conditions of purchase of securities through his firm and finally placed an order in December, 1997 for purchase of government securities to comply SLR requirement. Sheth then purchased 10.50 percent GOI 1998 for us for a consideration of Rs 35,30,625 and we also had paid him the amount and later, both the parties have completed their part of obligation," said the complaint.
During the 1997-1999 period, the said bank purchased various government securities through Sheth and in all the cases, both of the parties had completed their part of obligations in respect of payment against purchases and delivery of government securities.
"Till then there was no problem and Sheth maintained his promises and the banks were hapy with good returns and slowly, Sheth made his impression among number of co-operative banks in Gujarat, including the eight which now have faced the taint of the scam," said a senior officer of Economic Offences Wing.
During 1999, Sheth also introduced himself to NPCBL and other banks as a director of Giltedge Management Services Ltd and again started dealing into transactions. In late 1999, Sheth again changed his way of presentation and then he was a top-man from Euro Asian Securities Ltd. "Again we dealt with him on the basis of his goodwill and placed orders for purchase of securities for SLR purposes through his new broking outfit," said an official of NPCBL.
Sometime in January, 2000, Sheth came back to his pet banks in Gujarat and this time, he was not alone.
"With one Sanjay Agarwal and N S Trivedi he came to us and told that Euro Asian Securities has been renamed as Home Trade Ltd which is a member of the National Stock Exchange for debt market. They furtehr made a statement that their business promotion activities shall be handled by celebrities like, Shahrukh Khan, Hrithik Roshan, Sachin Tendulkar and Priyanka Chopra which created a good impression among us and we started dealing once again," said the complaint with the EoC.
Till the end of March, 2001, NPCBL also sold certain government securities through Home Trade. Everything was running without any hassle among the parties concerned till Home Trade defaulted in delivering the securities worth Rs 24,76,52,925 for which consideration was fully paid by NPCBL.
"We had telephonically and personally followed up the matter with the broker, mainly with Sheth for delivering the securities but they had given false assurances and not delivered the securities so far. Our directors and officers were shocked on April 28, 2002, when they could not find the top men of Home Trade, including Agarwal and Sheth in its office and seemed to be absconding," said the bank official, requesting anonymity.
"In all earlier transactions, the amount involved was smaller than this final deal but we could never think that Sheth will make us a fool in such a way, even after we dealt with him for five long years," the official added.
