The Enforcement Directorate has filed a complaint before the Adjudicating Authority under the Prevention of Money Laundering Act against some of the accused in the IPO scam. These accused entities’ shares have also been attached, said an ED official.
The IPO scam is related to certain entities cornering IPO shares (in 2003-2005) reserved for the retail category by using fictitious demat accounts. These demat accounts were then ultimately transferred, through key operators, to the financiers of the scam. The financiers made their gains on the first day of listing of these shares.
Investigations
“We believe that some of the shares were passed on to the ultimate financiers and even sold in the market. We are tracking the trail of how the money could have flown,” said the ED official.
There are now several investigating authorities throwing the dragnet around the accused and their assets related to the IPO scam. SEBI, the securities watchdog, is itself in the midst of an enquiry into the intermediaries, key operators and financiers in the scam. The board has frozen several of these entities’ demat accounts and also debarred the accused from transacting in the equities market.
An income tax official said that department was looking into “all the persons” involved in the scam and examining their I-T returns. It is believed that the I-T department has also sounded out SEBI on attaching the accounts of some of the accused.
The Central Bureau of Investigation has already filed a charge-sheet against 22 accused in the IPO scam in a Mumbai Court. However, the CBI charge-sheet is against intermediaries and key operators, and does not mention the financiers, said sources.
The officials from the ED and IT department said they would be investigating all the entities related to the case, including the ultimate beneficiaries or the financiers. However, it would be difficult to crack the “layering” in the scheme of things (locating the ultimate financier), said an official close to the investigations, reports The Hindu Business Line.