Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusiness

Delhi Police arrests Allied director for misuse of securities of Dalmia Bharat

Apart from the EoW, the Serious Fraud Investigation Office (SFIO) is also investigating the matter, and even the Securities and Exchange Board of India (SEBI) has ordered a forensic audit.

August 17, 2019 / 06:24 PM IST
Representative Image

Representative Image

The Economic Offence Wing (EoW) of the Delhi Police arrested Awanish Mishra of Allied Financial Services on the night of August 16 on charges forgery and cheating, which were put forward by the Dalmia Bharat group.

The EoW will produce Awanish Mishra at the Karkardooma court on August 17.

The EoW had registered its first information report (FIR) on March 26. The EOW also made officials of Allied Financials, including Awanish Mishra, a party to the FIR. It also registered a case against the National Securities Depositary Limited (NSDL) Managing Director Gajulapalli Nageswara Rao Venkata, company secretary Prasad T. Poojary and Chief Financial Officer Vaishali Vaidya.

The FIR stated,"Subsidiary of Dalmia Bharat OCL Cement limited and Dalmia Cement East limited invested in mutual fund worth of Rs 344.07 crores. They availed service of NSDL and its participant Allied Financial Services Pvt. Ltd (sic)."

On December 27, OCL Cement and Dalamia Cement East had submitted a redemption request. As per the rules and market practices, the redemption value of the securities should have been credited to their bank account on December 28. However, they have not received their money till date.

On January 25, NSDL informed the Dalmia group that there were no securities available in their demat account. The complaint put forward by the Dalmia group stated that Allied fabricated and forged NSDL documents to furnish periodic statements that confirmed securities in Dalmia's account. Account ledgers maintained by NSDL also contained many transactions which were carried out without their consent, some of which included a transfer of collateral put up by Dalmia to several companies of the Allied group.

The complaint put forward by the Dalmia group read,"They have all hatched a criminal conspiracy. AFSPL, Money Mishra Overseas and their director Awanish Mishra, fraudently transferred securities from their own account to the account of IL&FS, who in turn seems to have offered the same as collateral to NSE clearing corporations, fully knowning that securities belonged to Dalmia group."

"NSDL being a part of the conspiracy was also fully aware of all the illegal and fraudulent acts. We have not received any message from NSDL as regards to the transfer of our securities, nor did we receive any statement from NSDL," it added.

The new board  of IL&FS also conducted a forensic audit, which was carried out by Grant Thornton. As per Grant Thornton's report, the Allied group had a personal relationship with officials of IL&FS Securities (ISSL), and found many instances, worth Rs 24,227 crore, where collateral was either short or not collected by ISSL".

Apart from the EoW, the Serious Fraud Investigation Office (SFIO) is also investigating the matter, and even the Securities and Exchange Board of India (SEBI) has ordered a forensic audit.

SEBI has approached Supreme Court for its jurisdiction matter, and its next hearing is on August 26.

IL&FS Securities Services (ISSL) was removed  by the NSE Clearing Corporation (NCC) as a clearing member due to non-payment of dues on July 25.

The Rs 380 crore fraud by Allied, through IL&FS Securities, used client collateral for its own trades. The money was lost and dues piled up. The company’s other deposits with IL&FS Securities were disallowed as means for repayment by the NCC as the corporation awaits the court decision on the matter.

Tarun Sharma
first published: Aug 17, 2019 03:22 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347