How they did it
The accused came out with an advertisement asking people to get one photograph clicked and get two copies free
A large number of people availed of the free service
The accused kept photographs for fictitious bank, DMAT accounts
An application was made for share allotment to account holders
Once the allotment was made, the shares were transferred to Panchal's account, who passed them to financers
Financers offloaded the shares on the opening day of the listing and made illegal gains as list price was higher then allotment price
Full Story (From Hindustimes.com)
THE CBI conducted searches at 21 places of officials and brokers in three cities on Wednesday, as a follow-up to the investigation into the initial public offer (IPO) scam in Infrastructure Development Finance Corporation (IDFC) and YES Bank.
This comes close on the heels of Finance Minister P. Chidambaram's commitment in the Lok Sabha last week on taking "severe action" against the accused in the scam.
The searches were being conducted at 15 places in Ahmedabad, five places in Mumbai and one place in Delhi against certain individuals, bank managers and lead managers. The searches will provide leads in the investigation against the case registered by the Bank Fraud and Securities Cell of the CBI on a complaint by the Securities and Exchange Board of India (SEBI) which resulted in loss of Rs 32 crore to the exchequer.
Among the premises searched by the CBI were that of the applicants, managers of several bank branches, brokers and depository partners. According to the CBI FIR, certain irregularities were found in the IPO of the two banks which included opening up of 14,807 dematerialised (DMAT) accounts by four investors with IDFC whereas they had their DMAT accounts with Bharat Overseas Bank.
According to CBI, there were 6,315 fictitious DMAT accounts opened for procurement of YES Bank shares out of which 6,221 had the same address of "402-403 Shashwat Building, Opposite Gujarat College, Ahmedabad".
In the IDFC case, there were 27,064 fake bank accounts out of which 4,990 had the address of "406 Shashwat Building", 4,971 had common address of "403Shashwat Building" and 4,946 had an address of "307-Shashwat Building".
The searches have revealed that one financer who cornered Rs. 1.5 lakh shares of IDFC and 30,000 shares of YBL made a profit of Rs 4.6 crore.
Similarly, another financer has made a profit of Rs 3.88 crore. A third financer in a likewise manner has sold 40,000 shares of YBL and 1,60,000 shares of IDFC.
Evidence has been gathered that one financer has given approximately Rs 30 crore to Roopalben N. Panchal for investing in IPOs.
The searches have also yielded about Rs 1 crore in cash and substantial investment by these investors in other assets. In case of one financer, the recoveries include details of 1,100 bank accounts in HDFC, 4,000 bank accounts in ING Vysya Bank and 6,000 D-mat accounts in M/S Karvy Stock Broking Ltd. The same financer has invested Rs 21 crore in these two shares.
Quite intriguing
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