The Central Bureau of Investigation (CBI) yesterday arrested Chain Roop Bhansali, chairman of CRB Caps, the key figure in the Rs 1,200 crore scam that rocked the foundations of the non-banking financial services industry last month.
Bhansali was brought back from Hong Kong by a team of CBI officials nad arrested soon after the Air India flight touched down at the Indira Gandhi International Airport.
The fugitive businessman, who had escaped to Hong Kong soon after the scam broke, returned along with his wife Manjula, parents, sister and his two children. Although his wife is also a director in CRB Capital Markets - which has been at the centre of a sordid tale of financial skulduggery that left thousands of investors in CRB group companies high and dry - she was not arrested and allowed to go free along with the rest of the family members.
Bhansali will be produced in court tomorrow where the CBI will apply for transit remand. Thereafter, he will be taken to Bombay for further interrogation. He will be accompanied by V N Prasad, a superintendent specialising in economic crimes. If Bhansali is eventually booked for the charges listed against him, he could end up serving seven years in prison, said Prasad.
"We have followed the rule book", said a beaming CBI director Joginder Singh at an impromptue press conference in the CBI headquarters.
The CBI chief, however, refused to divulge the modus operandi of the entire operation. "It is a trade secret and we cannot divulge," he said.
The stock markets, which saw a correction towards the end of last week after a sustained rally over six trading sessions, is expected to react with nergousness to the new development when it opens for trading today since Bhansali has had close links with key market players. Marketmen fear the repercussions from any confessions that Bhansali might make to the CBI.
Before the press briefing, a visibly shaken Bhansali, sporting a crumpled blue suit without a tie, bowed in 'namaste' to acknowledge the CBI chief. He was, however, not allowed to answer any questions from the media.
But clearly, the CBI had gone about its operations in a planned manner and kept the government posted. Last Thursday, the Union cabinet approved a proposal to sign a treaty with Hong Kong for the extradition of fugitive offenders. The CbI chief refused to clarify whether Bhansali was the first offendor to be deported from Hong Kong under the new treaty.
Officials disclosed that a senior SP had left for Hong Kong four days ago and was laer joined by Joint Director M L Kumawat and SP J P Bhasin on Saturday.
The CBI had registered a case on May 20 against Bhansali and unknown officials of the State Bank of India (SBI) for cheating the bank to the tune of Rs 57 crore. CRB Caps allegedly used their accounts in SBI to siphon out funds from the bank under the guise of encashment of interest warrants and refund warrants of principal amount.
A CBI release said that initial investigation had revealed that the total amount involved in the scam was over Rs 931 crore. This includes money belonging to common investors and public issues. The Unit Trust of India and the government of Gujarat also lost money in the scam.
Last Wednesday, the CBI had arrested six persons involved with the CRB group and seized investment documents worth crores of rupees besides other papers which reportedly threw light on the extent of irregularities at the non-banking financial company.
Those arrested included four directors of CRB Capital Markets Ltd, besides a financial controller and a relative and close associate of Bhansali. The CBI also conducted simultaneous searches in 10 cities and seized incriminating documents and shares belonging to CRB Caps and its satellite companies. On May 21, the RBI filed a winding-up petition in the Delhi high court which, a day later, directed the official liquidator to take over the assets of CRB Caps.
Short in the arm for Joginder
THE ARREST of C R Bhansali has turned out to be a coup of sorts for the Central Bureau of INvestigation and its chief Joginder Singh who has been under fire from several quarters for his proactive role in the agency's investigations.
Effected in the face of severe odds, the arrest has come as a shot in the arm for the CBI director. It is now unlikely that Sngh will be eased from his present portfolio, which in turn holds major implications for both the government and the Congress party.