The Hindu : National : Stock scam: Dinesh Dalmia arrested

Online edition of India's National Newspaper
Tuesday, Feb 14, 2006

National

National

Stock scam: Dinesh Dalmia arrested

New Delhi: In a breakthrough in the probe into the Rs .595-crore scam that shook the capital market, the CBI arrested the Director of DSQ software company Dinesh Dalmia here, ending a three-year search for him. Mr. Dalmia, against whom an Interpol Red Corner Notice had been issued, was taken on a transit remand to be produced before the Additional Chief Metropolitan Magistrate (ACMM), Egmore, Chennai, where a case against him is pending.

The accused was nabbed late on Saturday from a South Delhi location by the sleuths of the CBI's Bank Fraud and Securities Cell.

He had fled the country in December 2003 and set up a base in the U.S. after it came to light that his company's Rs. 595-crore preferential allotment during the 2000-01 bull run in the stock markets was a fraud.

Mr. Dalmia, accused of criminal breach of trust, cheating and fraud, is alleged to have induced National Securities Depository Limited (NSDL) to dematerialise and credit 130 lakh equity shares of the software company as fully paid shares.

The shares were transferred allegedly by Mr. Dalmia to his front companies and entities without payment of sale considerations.

These shares were then illegally sold at stock exchanges through brokers notwithstanding the fact that these shares were unallotted or unlisted and prohibited for trading, the CBI charged. — PTI

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