NEW DELHI: The Central Bureau of Investigation on Wednesday conducted searches at 27 places in four cities in connection with the Initial Public Offering (IPO) scam in IDFC and YES Bank Limited (YBL) and recovered nearly Rs.1crore in cash from two persons. Searches in Delhi, Mumbai, Ahmedabad and Hyderabad were carried out after the agency registered two cases in a Mumbai designated court against 21 persons. The cases mainly involve Roopalben Panchal, her husband and her daughter and some unknown bank officials.

The CBI's Bank Securities and Fraud Cell booked these persons for allegedly making illegal profit after "cornering" a large number of shares meant for retail investors in the IPO issues of YES bank and IDFC. The cases were registered on a complaint from the Securities Exchange Board of India, a CBI release said here. The searches revealed that a financier had cornered Rs 1.5 lakh shares of IDFC and 30,000 shares of YBL and made a profit of Rs 4.6 crore. The CBI team recovered Rs. 46 lakh from him and Rs. 51 lakh from another financier, who had made a profit of Rs 3.88 crore. A third financier is alleged to have sold 40,000 shares of YBL and 1,60,000 shares of IDFC.

The CBI said it gathered evidence of yet another financier having given approximately Rs. 30 crore to Roopalben for investing in IPOs.

In the case of another financier, the recoveries include details of 1,100 bank accounts in HDFC, 4,000 bank accounts in ING Vysya Bank and 6,000 Demat (dematerialised) accounts in Karvy Stock Broking Ltd. He is also alleged to have invested Rs 21 crore in the shares.

The SEBI complaint said certain individuals and entities had cornered the shares reserved for retail applicants by making applications in fictitious names.

For this purpose, a group of individuals opened fictitious accounts, particularly with Bharat Overseas Bank, Ahmedabad, and its Worli and Goregaon branches in Mumbai.

These individuals and entities also opened several fictitious Demat accounts with Depository Participants (DPs).

On allotment of 150 shares each in the names of 6,315 fictitious individuals (6,221 of them had the same address given in the bank account and Demat form), 9.47 lakh YBL shares were transferred on July 6 last to the Demat account of Roopalben.

From this account, the shares were further transferred to the Demat accounts of several conspirators in off-market deals on July 11, 2005, a day prior to the listing on the stock exchange.

On the day of the listing, the majority of these shares held by the conspirators were sold in the market at the prevailing price, which was much higher than the allotment price.

The agency has found that the main accused created fictitious accounts by procuring the photographs of a large number of people. Roopalben N. Panchal inserted advertisements offering to photograph people free of cost.

She used these photographs and false names to open bank and Demat accounts.

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