Sebi, RBI yet to complete probe into TataFin fiasco

One year after the Rs 500 crore scam involving Tata Finance Ltd broke out, market regulator Sebi, the Reserve Bank of India and other invest...

One year after the Rs 500 crore scam involving Tata Finance Ltd broke out, market regulator Sebi, the Reserve Bank of India and other investigating agencies are yet to make any progress in the case.

The Tatas have filed 11 complaints to the concerned authorities—Sebi, RBI, BSE and Mumbai police—but the case has been dragging on with little action from the authorities. When contacted, officials in Sebi as well the police said ‘investigation is in progress’.

In its latest complaint (dated July 8, 2002), Tata Finance has alleged that Dilip Pendse (its former managing director who was sacked for his alleged involvement in the scam) had undertaken illegal and unauthorised carryforward transactions in Global Telesystems through Jhunjhunwala Stock Brokers on behalf of TFL’s associate companies Inshaallah Investments and Niskalp. Pendse could not be contacted for his comments.

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Sebi had last year launched an investigation against Tata Sons director Talaulicar for alleged insider trading in Tata Finance shares.

He is alleged to have sold TFL shares last year with back-dated transactions. Tata Finance had filed a complaint on June 28 before the Economic Offenses Wing of Mumbai police alleging criminal breach of trust by Pendse and the broking firm.

Apart from violation of carry-forward norms, TFL has also filed complaint with Sebi in December 2001 for alleged ‘insider trading’ norms by Pendse.

The Tatas have also filed complaint before the RBI against Pendse for alleged ownership of unregistered companies namely Anjudi Property & Investment, Nalini Properties, Khudah Gawah Investments and Dhanoo Properties & Investment on December 24, 2001.

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TFL had also filed a complaint with the RBI’s Department of Non-banking Financial Companies for Pendse’s alleged violation of Section 451A of RBI act by Inshaallah Investment and India Emerging Companies Investment repeatedly in September 2001, March and April this year. No action has yet been taken on these charges, sources said.

Further, Tata Finance had filed a complaint before the Investor Service Cell of BSE for confirmation of trades carried out by Niskalp, Inshaallah and India Emerging Companies Investment for trading in Global Telesystems. “But there was co-operation from the concerned authorities,” sources said.

However, the Bombay High Court had given interim relief on a civil suit filed against DS Pendse and others claiming damages of Rs 424.50 crore. The next hearing will be on September 9, 2002.

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