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CBI arrests Harshad Mehta, brothers

Onkar Singh in New Delhi

The Central Bureau of Investigation arrested 'Big Bull' Harshad Mehta and his brothers -- Ashwin and Sudhir -- for misrepresentation of facts before the custodian appointed by the court in 1992 securities scam case.

Mehta and his two brothers have been arrested in a case relating to 2.7 million missing shares of 90 companies.

"The economic offences wing of the CBI registered a fresh FIR against Harshad Mehta and his brothers under section 380 of the IPC and they were arrested this morning (Friday) for concealing information from the custodian appointed by the court," S M Khan, spokesman for CBI told newsmen at a press conference in New Delhi on Friday.

According to the information made available by the CBI, Mehta and his brothers had deliberately concealed information regarding 2.7 million shares belonging to 90 companies of the country before the custodian who had been appointed by the special court to take charge of the properties, moveable and immoveable assets of the Mehta brothers.

"The first information report was registered on the basis of the complaint made by the custodian before the special court. The court had directed the CBI to investigate the matter and find out the truth," Khan said.

When the three brothers were asked to give details of the shares of the companies they held, Ashwin Mehta had said the custodian that 2.7 million shares, running into several millions of rupees, had been stolen when they were in jail.

The custodian asked them to give details in writing. He was not satisfied with the explanation given by the Mehtas and decided to complain to the court.

"During the investigations it was found that the said shares had not been stolen. These shares were transferred into benami (fake) names by the three brothers and were then sold in the market. The Mehtas were the beneficiaries of this illegal sale. These shares could not have been sold as they were the property of the custodian," Khan added.

In some cases it was found out that the person in whose names these shares had been transferred did not even know about it.

The shares belonged to companies like ACC, Ashok Leyland, Ceat, Gujarat Ambuja, Apollo Tyres, Tata Tea, ITC Agro, S R Shipping, and Arvind Limited.

"Investigations are still in progress," Khan said.

Mehta has been arrested in the past in connection with the scam, which led to a stock market plunge and scandal that undermined confidence in Indian share markets.

Lawyers for the accused could not immediately be reached for comment.

The arrests follow a complaint by a special court hearing the securities case.

"We will apply for their police custody shortly," the CBI official said.

Mehta was the driving force behind an unprecedented stock market boom in the early nineties, fuelling the rise by using vast amounts of funds from the inefficient gilt market.

Additional inputs: Reuters

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