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Like a dream, he raised 1,100 cr and made it vanish into thin air

It's so easy to shake off a lakh investors and depositors. Here is how C R Bhansali did it: Move houses, change your phone numbers, and flit...

Written by George Mathew
Mumbai | May 26, 2003

It’s so easy to shake off a lakh investors and depositors. Here is how C R Bhansali did it: Move houses, change your phone numbers, and flit in and out of town.

Nobody’s caught up? After some time you can even take some risks—attend a dotcom seminar, strike the odd business deal. The one rule you absolutely do not break: Keep away from the media glare.

ONE FROM HIS PR ALBUM: Bhansali is dreaming of a comeback

Ask your friends to shut up too. Today, everybody anyway disowns the man whose calling card was such a mouthful. Dr Chain Roop Bhansali, the self-styled B Com (Hons), FCA, ACS, Ph.D, MIIA (US), Diploma in Journalism. His close associates hang up and refuse to meet and discuss him.

Some possible hiccups: You may have to spend a little time in jail; but you are out in three months. They will attach and seal your offices. A liquidator goes through all your things and puts a price to it. But you can get over that.

The group fell like a proverbial house of cards just six years ago. It took other finance companies like JVG Finance, Prudential Capital Markets, Helios, Hoffland Finance and DSJ Finance down with it. Like a plug pulled out of a bathtub, the confidence of depositors and investors simply drained. The bottomline? Investors had lost Rs 2,500 crore in these companies alone.

Money raised from investors: Rs 900 cr
Money from financial institutions: Rs 200 cr
When the shares were suspended: May 1997

After the CRB crash, the Reserve Bank of India had the decency to panic and establish better norms. Market regulator Sebi too created a system through which mutual funds could be monitored better.

Now comes the joke. As late as February this year, Bhansali pushed for a repayment plan for CRB Capital Markets. His investors are not laughing. ‘‘I’ve no hope of getting back my Rs 1-lakh deposit,’’ says Karkal Umanath Hegde, a former employee of CRB.

Investors who retired hurt

Abdul Kader Mukadam, a retail investor in Mumbai, sunk around Rs 2.4 lakh in CRB Capital Market’s fixed deposit scheme in early 1994. ‘‘I was impressed by the growth of the company. I never imagined it would collapse one day!’’ he says, adding, ‘‘I invested my retirement benefits.’’ Since 1997, when CRB collapsed, he’s wiser. ‘‘I stopped putting money in fixed deposits of companies. I trust only public sector banks now.’’

Karkal Umanath Hegde lost his job with CRB and Rs 1 lakh that he invested in the company. ‘‘I never thought it would sink in this manner. This episode has taught me a lesson.’’ Though the official liquidator has taken steps to return the investors’ money, he’s not hopeful of getting it back. ‘‘I had invested this money from my retirement benefits.’’

Bhansali recently pulled another rabbit out of his hat. He checked with Delhi High Court and called a meeting of all secured and unsecured creditors and shareholders of the company. What was on the agenda? A revival scheme. It got stuck in a legal tangle.

‘‘He proposed to pay back investors in instalments. But nobody was convinced,’’ says one of his close associates, who refused to be named.

These days, the court-appointed liquidator goes about his job and investors quietly file affidavits for repayment.

The Indian Express made several attempts to contact Bhansali. He ducked every time. A close associate of Bhansali said: ‘‘He’s somewhere in Delhi.’’ When asked, former vice-chairman of CRB Capital Market S K Jain intoned: ‘‘I have not been in touch with Bhansali or CRB group for the past six years. I’m now a practising company secretary. I don’t know anything about Bhansali.’’

The man who visualised a financial empire now moves in the shadows.

(Are you too a victim of Loot and Scoot? Write to us at campaign@expressindia.com.)

READ PART-I

Missing from BSE: Rs 10,000 crore

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