Real scam in the virtual abode

In this scene, Home Trade rolled out the biggest ad campaign ever in 2000 and started attracting shareholders. Its shares shot up in a small period to Rs 600 and small investors jumped onto the bandwagon.

As the company did not have a revenue model (like most dotcoms) it needed something to sustain its high-cost existence. And then the co-operative banks were approached.

Their govt securities did not exist

Riding the dotcom boom, Home Trade’s ad campaign was so effective that its brand name got instant recognition across India. It hired employees at four times their prevailing salaries.

The company even launched a new product calling it Fast Moving Financial Goods but it failed to impress investors that much.

In order to sustain its high-cost operations, Home Trade lured co-operative banks with two to seven per cent higher returns on investments in gilts. The government securities were not physically delivered and investigations later revealed that these did not even exist.

The embezzled money was used to trade in shares of companies in which Agarwal had stuck a leg. At the same time, the company started reeling in small investors with its own shares.

The company was growing at a breakneck speed and launched two products which did not offer any returns till the company went bankrupt. They even sent bogus certificates to co-operative banks, which proved to be its nemesis. Soon after, it crashed like a pack of cards.

Collapse was as quick as its rise

When co-operative banks who had hired Home Trade to buy government securities (G-Secs) on their behalf noticed that they are getting photocopies if not forged bonds for which they paid hard cash, they went straight to the police.

With Nagpur District Central Co-operative Bank’s first complaint on April 25 last year, the can of worms opened. Reports started pouring in from small single city banks like Cuttack and Surat that the company has taken money to buy G-Secs but failed to deliver them.

The Nagpur police moved in fast to arrest Sanjay Agarwal and NCP leader and the then chairman of the Nagpur District Central Co-operative Bank (NDCCB), Sunil Kedar.

The very next day, complaints started pouring in from all over Maharashtra. Four co-operative banks in Surat and Navsari complained about another Rs 80 crore.

A year after the arrest of main accused Kedar, who was instrumental in investing from the bank’s kitty in Home Trade, is a free bird.

The hearing in the government securities scam case is inching along in Nagpur. The main reason is that three of the 11 main accused in the scam have been taken in custody in other cities.

The Crime Investigation Department (CID) filed a chargesheet in the court of Judicial Magistrate R M Purwar on November 22. But the case hasn’t reached the evidence stage yet. The government pleader told The Indian Express that the delay was also due to pendency of cases at the trial court.

Meanwhile, Kedar is trying to leave his past behind. Last month, his well-wishers and supporters celebrated his 42nd birthday by putting out advertisements in local papers. It is being speculated that he is all set to take a fresh guard for a new innings in the politics. When Express tried to contact him, his residence staff said he was at Walni, a nearby village, for election to a vacant Zilla Parishad seat there — proof that he is taking a fresh political guard.

In cyberdream, there are no offices

The search for Home Trade begins and ends in cyberspace. The company’s only premises at Vashi railway station was a rented office. The company had no assets to fall back to. Its promoters are in jail and co-operative banks were re-financed at the cost of small depositors.

Express went to its registered office at Sohrab Hall, Tadiwalla Road, in Pune, which at the time of the scam had only a nameplate in front of a tiny rented office. The office was shut within hours of the scam breaking out and the nameplate vanished even before that. There was nothing there and the new owner knows nothing about Home Trade.

(With inputs from Vivek Deshpande in Nagpur and Geeta Nair in Pune)