Cbi Disputes Dalals Plea Against Stanchart

The Central Bureau of Investigation yesterday opposed a petition seeking the special courts directive to the investigating agency to complete its probe on the role of Standard Chartered Bank in the securities scam.

The petition, filed by a notified party in the securities scam, Bhupen Dalal, came up for hearing before Justice S N Variava, judge of the special court probing the securities scam.

Counsel for CBI, V C Gupte, opposed the petition on the grounds that it was not legally maintainable because Dalal had no right to demand that the investigating agency should conduct its probe in a particular way. His arguments were inconclusive and would continue today, when the court would also hear Stanchart before delivering its verdict.

 

Stanchart has withdrawn civil cases involving claim of Rs 749 crore, but the CBI case based on a Stanchart complaint in the securities scam is pending before the court.

One of the bank managers, Prakash Yardi, had pointed out irregularities to its management on September 10, 1990. An inquiry was ordered the next day. The inquiry officer, Geoff Williams, observed that the bank was exposed to substantial credit risks and was contravening regulatory controls.

Dalal argued that the Yardi report as well as the inquiry report were not part of the documents in the case and not referred by CBI, though they were widely publicised.

The Yardi report points at higher-ups in Stanchart in London and Mumbai for their involvement in the transactions.

Dalal asked that CBI be directed to seize the two reports and record the statements of the concerned Stanchart officials. He argued that CBI had not examined the role of such officers indicted in these reports.

The CBI had also failed to take the statements of these high ranking officials while submitting its report on June 30, 1997.

Besides, the CBI had not followed the directions of special court contained in its order of October 8. No investigation was conducted into deals recorded by Stanchart with Bank of Karad except those to which cost memos were supplied by Stanchart.

Moreover, he said, the CBI had not probed how the amounts under question were ultimately squared up or adjusted. No probe had been conducted by CBI into Stancharts books in relation to the amounts under dispute.

CBI should have sought explanation or clarification in relation to the very large amounts for which it appeared there were no proper entries in the Stancharts records, Dalal contended.