EOW has accused the fraudsters of duping the bank’s client of cash and shares
Source: The Economic Times (Mumbai), Nihar Gokhale, May 30 2012
The Economic
Offences Wing, or EOW, of the Mumbai police has filed a chargesheet against two
former relationship managers of HSBC accusing them of duping a client of cash
and shares worth nearly . 1.5 crore in 2009 and 2010.
The accused, Ram Avtar
Jangid, 31, and Veerendra Soni, 25, were working with HSBC’s Fort branch in
Mumbai where the client had an account. Jangid, who was the client’s
relationship manager, is absconding, while Soni was arrested in January and is
out on bail after investigations were complete, said EOW officials.
The EOW had taken up the case in January after Lata Bhandari, daughter of the client Narasimha Bakrabail Adappa, 90, noticed irregularities in the account, said the chargesheet.
The irregularities happened three years after Jangid was
assigned to handle Adappa’s ac
count in 2006, according to
the complaint. Between 2009 and 2010, Jangid allegedly took Adappa’s signatures
on various delivery slips, cheques and forms on the pretext of buying or selling
stocks and mutual fund units. But he used the signatures to misappropriate the
securities for personal gains, according to the complaint.
The chargesheet
alleged that on various occasions, when Adappa gave instructions to sell his
stocks, Jangid would take his signature on blank delivery slips and instead
transfer the shares into Soni’s account through offmarket transactions.
Jangid also allegedly created overdraft facilities against Adappa’s account
when Adappa made large cash withdrawals, giving the impression that the proceeds
from the stock sales were credited. To clear the overdraft, Jangid sold mutual
funds units held by Adappa by again taking his signatures on blank slips and
using a pretext of shifting to a different fund, the chargesheet alleged.
Using such signatures on blank documents, Jangid eventually opened a trading
account in Adappa’s name with the Fort branch of Hem Securities, a Jaipur-based
brokerage firm. Soni, who had left HSBC in the meantime, was a sub-broker with
Hem and
allegedly executed the transactions in Adappa’s account and pocketed gains.
Jangid also allegedly transferred . 2 lakh from Adappa’s account to Soni’s
bank account by persuading him to write a blank cheque, the chargesheet said.
Bhandari, according to the chargesheet, noticed the irregularities in the
account in September 2010 and approached HSBC, which then fired Jangid. The FIR
was subsequently lodged, naming Jangid, Soni, Hem Securities and HSBC.
“Soni
was let out on bail after investigations into his role in the crime were
complete. We have filed the chargesheet with the additional metropolitan
magistrate 19th court in Mumbai,” Arvind Wadhankar, senior police inspector and
investigating officer in the case, told ET.
HSBC and Hem Securities have not been named in the EOW’s chargesheet. In an
e-mail response, an HSBC spokesperson said, “The bank does not comment on
internal matters, particularly those relating to its customers and/ or
employees.”
The spokesperson also said, “HSBC follows local regulations and
international best practices in the conduct of its business. Customer
transactions are executed in accordance with customer’s instructions. Customer
grievances brought to HSBC’s attention are examined internally and where
information is sought by regulators/ authorities, the same is duly furnished.”
A Hem Securities spokesperson said, “BN Adappa had also filed an arbitration
notice with BSE, which was heard several times and eventually unconditionally
withdrawn in February 2012. EOW has only recorded our statement and we have not
heard from them since then. We are being unnecessarily dragged to different
forums in this case. There is still a debit of . 5.4 lakh in Adappa’s account
and there is a case pending in a Jaipur court for the recovery of this amount;
the case was filed much before the client approached any other forum. Also, Soni
was not a subbroker with Hem.”
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