Delhi-based Investor says financial services firm carried out trading worth Rs 500 crore from his demat account without his consent, using forged documents
Delhi-basedu00a0 Investor says financial services firm carried out trading worth Rs 500 crore from his demat account without his consent, using forged documents
Only a few months ago Sachin Bhardwaj, 35, felt he knew all the tricks of the trade. Now, he has serious doubts on the matter. Bhardwaj, a businessman and stock market investor, has accused renowned financial services firm Religare Securities of duping him of Rs 70 lakh. He also claims representatives of the company misused his demat account, with forged documents.
Sachin Bhardwaj PIC/Rajeev Tyagi
According to Bhardwaj, he transferred all his shares to an account with Religare in April, after receiving lucrative offers from the company.
"I transferred all my shares from my demat account with M/s Expotential to Religare. I received a lot of instructions about sale of shares on mobile. I asked Mahinder Singh, the branch manager with Religare at Rajouri Garden, about the contract letters which he said were on the way through courier. Meanwhile, I received a call from Religare regarding the sale of some of my shares, which I hadn't authorised. I immediately called up Mahinder seeking a clarification. He told me there was a mistake and no sales were made from my account. It still gave me a bad feeling about Religare," said the complainant.
Trade secrets!
Bhardwaj went out of the city for a family function. When he returned on the 2nd of June and went to the Religare office, he discovered that the amount of funds in his account was less than expected.
"I immediately contacted Mahinder and asked him to close my account. But he said that I was making good gains through my account and even congratulated me. I was shocked; I told him that I hadn't made a single transaction. So how was this possible? The branch manager told me that they have a research team which predicts how much gains a customer can make and then they get inside information of the share market and make transactions on behalf of the client. He even told me that before making the deals, he tried to call me but I was unavailable. I refused to sign on the consent form for trading and I never authorised them even in the client membership form," he added.
Bhardwaj said the executives told him he had already gained Rs 3.46 lakh and his account had been credited with 7 lakh rupees.
Easy come, easy go "I became suspicious, but the executive immediately told me that my account is secure. They handed over a copy of my demat account and I was told all the details have been emailed to me. On the 4th of June I got an SMS from National Securities Depository Ltd (NSDL) about debiting of 1169 shares of RIL (Reliance India Limited) from my account.
On the 5th of June, I again got an SMS that 1041 RIL shares had been credited to my account. So, essentially I had lost 128 RIL shares. I again contacted Mahinder, who told me not to worry as the rest of the shares would be shortly transferred to my account. Every time I became sceptical, the executives at Religare tried to allay my fears. On the 18th of June, I again received an SMS regarding the sale of 16 shares of L&T from my account. I called up Mahinder but he was unavailable. Even after I requested the closing of the account, the Religare representatives continued illegal sales through my account," he alleged.
Paper chase
Bhardwaj complained about the incident to the Securities and Exchange Board of India (SEBI), National Stock Exchange (NSE) and the Economic Offences Wing (EOW) on the 24th of June and again on the 25th of October.
"After complaining about the forgery in NSDL, I received proof that the executives had forged my signature and the quantity of my L&T shares had gone down from 2000 to 1000. The representatives of Religare Securities had carried out illegal transactions of 400 to 500 crore rupees through my account. In the process, I have lost shares worth around 70 lakh rupees," Sachin added.
Meanwhile the police refused to comment on the issue saying the investigations are at a primary stage. The victim has been advised by NSE to take up the matter for arbitration. Bu he has little faith that the mechanism will help him get justice.
"The arbitration court looks after matters related to such frauds, but any one can appeal only within 6 months of filing of the complaint. Religare officials are not providing me documents of the demat account to appeal in the court. Once 6 months are over, I would have nowehere to go," Sachin added.
Rs 70 lakh
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Amount involved in alleged fraud
Rs 500 crore
Approx amount of alleged illegal trading through the demat account
| The Other Side |
| Religare Securities Limited has received a complaint of Mr Sachin Bhardwaj from National Stock Exchange of India Limited (NSE) to which we have duly replied vide our letter dated August 02, 2010. Thereafter on August 16, 2010, NSE conducted a meeting between Mr. Bhardwaj and the company, wherein NSE advised Mr Bhardwaj to proceed for arbitration for redressal of his complaint / grievance. Further in the month of August 2010 we received a notice from Rajouri Garden police station regarding a complaint filed by the client wherein we have furnished all relevant documents / details to the Investigation Officer in the matter and are fully cooperating with investigation for the resolution of the matter. - Religare Securities |
| Penalty kick |
| Market regulator SEBI slapped a Rs 3 lakh penalty on Religare earlier this month over the financial service provider's failure to conduct due diligence while processing some of its clients' accounts. |
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