Shimla: A small stock broker is in the lock up for having fleeced over a dozen investors of about Rs 60 lakhs worth of stocks, which is expected to increase as more people come forward after discovering shares having gone missing in their accounts.
“It’s a first of its kind of economic offense in the city,†says Shakuntla Sharma, the investigating officer.
Skeletons began to tumble out when Jawahar Kaul, a banker lodged a complaint with the police against Hemant Kumar Saini – a sub broker for Reliance Money, about shares that the family held onto since 1945 having gone missing from the de-materialized (Demat) account.
Saini has been booked for economic offences and is in police remand up to 18th September.
The broker’s modus operandi was asking the investor to keep the clients copy about share transactions with him, which have allegedly been misused to transfer shares into his own or into others account.
Shares transferred into his account were either sold or transferred into someone debtor’s account, who had become a victim earlier to the fraud being played out. The money made by selling shares was used to gamble the market, either with spot or future trading.
Losses were never recovered in the process and the wheel stopped when Jawahar Kaul realized that yearly dividends had stopped coming.
Jawahar Kaul said, “When Saini failed to provide me a statement about my Demat account, I approached the police.â€
Kaul had only opened an account in January to convert paper shares into de-materialized shares that have gone missing.
Some of the share held by the Kaul family included blue chips; 2280 shares of Tata Chemicals bought in 1945, 120 shares of State Bank of India bought in the IPO for Rs 90/- and 600 shares of engineering giant L & T bought in an IPO.
Besides him, at least 9 other bankers who traded through Saini are believed to have been fleeced.
Saini is said to have made an admission before the police that the stock fraud is limited to 19 people. However, Shakuntla says, “Indications are that the scam is much larger as we need to crack many online transactions made. Saini has been in the brokerage business since 2004.
The broker’s computers have been seized. “Already the total amount has crossed Rs 60 lakhs and more people victims are coming forward,†says the investigating officer.
“The sale and purchase of stocks in such a manner could not have taken place without the knowledge of the main broker,†says Shakuntla Sharma adding, “and we are making them a party to the case.â€
Saini is franchise owner of Reliance Money and the role of the main brokers in scam too would be investigated,†said Shakuntla.
As Editor, Ravinder Makhaik leads a team of media professionals at Hill Post.
Spanning a career of over two decades in mass communication, as a Documentary Filmmaker, TV journalist, Print Media journalist and with Online & Social Media, he brings with him a vast experience. He lives in Shimla.
