New Delhi: The CBI on Wednesday conducted searches at 21 places of officials and brokers in three cities, including the national capital region, in connection with the Initial Public Offering scam in Infrastructure Development Finance Corporation (IDFC) and YES bank which resulted in loss of Rs 32 crore to the exchequer.
The searches follow after the case was registered by the Bank Fraud and Securities Cell of the CBI following a complaint by the Securities and Exchange Board of India (SEBI), CBI sources said.
The searches were being conducted at 15 places in Ahmedabad, five places in Mumbai and one place in Delhi against certain individuals, bank managers and lead managers.
SEBI had noted certain irregularities in the issue of IPO shares in the recent past relating to the two banks.
Enquiries indicated that a few entities had opened thousands of demat accounts with depository participants and bank accounts in the names of fictitious or benami individuals.
SEBI had pointed that the accused applied for shares in IPOs from these benami accounts in sizes permissible for Retail Individual Investors (RIIs) and obtained allotment and as a result, the genuine RIIs failed to get allotment or got allotment of fewer shares than they would have got otherwise.
SEBI had unearthed the IDFC scam in last month while the YES bank scam had come to light in December last year.
According to the CBI FIR, certain irregularities were found in the IPO of the two banks which included opening up of 14,807 Dematerialised (DMAT) accounts by four investors with IDFC where as they had their DMAT accounts with Bharat Overseas Bank.
The CBI investigation was on to examine whether there was a systematic failure on part of the lead mangers.
The agency alleged that Karvy-DP, which was registrar in YES bank scam had not adhered to "know-your-client" norms.
(With Agency Reports)
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