Home Trade probe: CBI turns to OCBs

The CBI’s Bank Securities and Fraud Cell, which is investigating the seamen’s PF scam, has narrowed its probe to the OCBs which Agarwal was associated with, particularly Euro Discover Technology Ventures, the promoter of Home Trade, Agarwal’s own company. EDTV is registered in Mauritius. Two other OCBs are also being investigated.

The transactions were funded by money taken from Indian institutions, like the seamen’s PF, for instance. While four ‘paper companies’ in Kolkata were used by Agarwal and his cohorts to liaise with the seamen’s PF office in Mumbai to acquire the funds, four other companies that the CBI has now identified, were used to buy Home Trade shares from EDTV. The CBI is in the process of tying up the connection, indicating that the ultimate destination of the PF money, therefore became EDTV. Another set of transactions where the money has been routed is other broker entities through which Agarwal was trading on stocks. Sources said he did use money from public institutions (including the co-operative banks) after he had built up liabilities on the stock market.

Ketan Sheth of Giltedge Securities was roped in by Agarwal for his in-depth knowledge of the institutions which had idle funds to invest.

The investigation is likely to throw more light on how OCBs are in fact just fronts for Indians who have been using Indian money to siphon out profits abroad by using the capital markets. The relaxation of norms by the RBI for retention of OCB funds in India is being closely examined.