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CBI hires experts to trace SPFO diversion

BS Regional Bureau

The Central Bureau of Investigation has roped in the services of financial experts and bankers in a bid to trace out the flow of defalcated funds from the Seamen's Provident Fund Organisation .

The investigating agency is looking for leads as to whether the Rs 930 million that the SPFO lost has found its way into the stock markets or was sent abroad through hawala channels.

The SPFO, a couple of weeks back, found a big hole in its corpus as a host of broking firms run by Ketan Seth failed to deliver government securities and public sector undertakings bonds to the SPFO.

The then SPFO commissioner A K Gond had unauthorisedly entrusted the Organisation's funds to the broking firms for investing in Government paper and PSU Bonds.

Interrogation of Ketan Seth has revealed that he had diverted Rs 700 million of SPFO funds, said CBI sources.

They revealed that Gond received kickbacks amounting to Rs 15-20 million between 1998 and 2000 in lieu of allowing the broking firms access to the SPFO funds.

Of this amount, the CBI officials pointed out that Rs 5 million was invested through Shirley Investments and Rs 3 million through Anki Smita investments.

It is believed that investments into these two firms was routed through a few Mumbai's Bhayander-based "parties".

CBI officials averred that Gond owns Rs 8 million worth of flats and has a balance of Rs 1.2 million in various bank accounts.

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