CRB liquidation opens a Pandora’s box

C R Bhansali NEW DELHI, May 27: As investigations proceed, the CRB Capital Markets issue gets more intriguing with details surfacing abou...

C R Bhansali

NEW DELHI, May 27: As investigations proceed, the CRB Capital Markets issue gets more intriguing with details surfacing about the magnitude of the company’s dealings. CRB Capital, belonging to Chain Roop Bhansali, is piling up more liablities than assets even as a liquidator probes the company’s affairs following a high court directive.

Market sources claim that the actual amount involved in the scam could be much higher than Rs 1,000 crore since many dealings of the company were not above the board.

They said many of the entries in CRB’s books were fictitious and the liquidation process could open a Pandora’s box. Shares of other NBFCs have begun to feel the impact of the CRB scam and investors in general have shown panic in redeeming their fixed deposits in other companies, they said.

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Meanwhile, all major bourses including Delhi have banned trading in shares of the group companies which has dampened the market sentiment to some extent.

One of the small investors in this company, Mrs Pushpa Sehgal said “The regulatory body is only talking about the fixed depositors in this company but what will be the future of the shareholders who have invested their hard earned money”.

Marketmen said after winding up of any company, the first preference goes to banks, secured creditors and preferential shareholders while the shareholders’ claim comes in the last.

Maharashtra Deputy Chief Minister Gopinath Munde has convened a meeting of top officials of various financial institutions to decide on the future course of action in the CRB fiasco.

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The meeting is scheduled for Thursday at the Mantralaya, secretary of Investors’ Greviances Forum, Shailesh Ghedia, said in a press release. He said officials from the Reserve Bank of India (RBI), Securities Exchange Board of India (SEBI), Bombay Stock Exchange (BSE), National Stock Exchange (NSE), Mumbai police and state home department would attend the meeting.Meanwhile, the Securities and Exchange Board of India (Sebi) HAS FAXED THE status report of the beleaguered CRB group of companies to the finance ministry.

The status report, pertaining to the CRB Mutual Fund, CRB Merchant Banking Services and CRB Broking and Consultancy Services, were sent to the ministry late last night, Sebi sources said.

According to sources, the “factual position” of the non-banking finance company were conveyed to the ministry on the various inspection reports carried out by the regulatory body.

The SEBI has been tight-lipped over the entire episode in the absence of its chairman D R Mehta, who is away to attend an international conference in South Africa along with senior executive director Pratip Kar.