HISTORYThe Bhansali scam took place in the year 1995 and is worth Rs 1,200 crores and the key person involved in this businessman was Chain Roop Bhansali. Between the years of 1992 - 1996, Chain Roop Bhansali was running a lot of financial firms like CRB Capital Markets, CRB Mutual Fund and CRB Share Custodial Services. He offered lot of attractive schemes and made the public and big organizations to invest in his financial outfits. Once investment was made Bhansali very conveniently transferred the money to imaginary companies. Chain Roop Bhansali made enormous amount of money through his various financial outfits like through CRB Capital Markets he raised Rs 176 crores, CRB Mutual Funds -Rs 230 crores and fixed deposits earned him around Rs 180 crores. Thus he easily owned money worth Rs 900 crores from all the sources. Bhansali would pay the interest on investments by borrowing from the market, but however when there was a stock market crash in the year 1995 it took a toll on all the financial institutions owned by Bhansali and he swindled nearly an amount of about Rs.1200 crores.
CHAIN ROOP BHANSALIChain Roop Bhansali belonged to a very common middle class jute trader's family in Kolkata. He had a degree in Commerce and in the year 1980 he completed his Chartered Accountancy. It was at the time of his completion of Chartered Accountancy he also ventured into his financial consultancy firm, named 'CRB Consultancy'. Because Bhansali had lot of personal contacts with people in various field he was very quickly and successfully able to get business of providing issue management services to a few well-known and reputed companies in Kolkata. The name CRB consultancy was changed to CRB Capital Markets and became a public limited company in the year 1992. The CRB capital market did very well in various fields and rendered good service in various fields like merchant banking, leasing and hire purchase, bill discounting and corporate funds management, fixed deposit and resources mobilization, mutual funds and asset management, international finance and forex operations. In a very short span of time he raised an extremely good amount of money. CRB Corporation Ltd., raised Rs.84 crores through three public issues between May 1993 and December 1995.
ARIHANT MANGAL GROWTH SCHEMEThe CRB Mutual Funds which was launched in August 1994 came up with a successful scheme named Arihant Mangal Growth scheme which raised almost Rs.230 crores from the market.The financial institution of Bhansali also came up with fixed deposits which intensified the fixed deposits from the investors to Rs.180 crores. Another 100 crores was lifted in January 1995 by the CRB Share Custodial Service. A large group of people turned up for a specific scheme where an A+ rating given by CARE and upfront cash incentives of 7-10% .Also Bhansali was maintaining a close and harmonious relationship with almost all the religious leaders and political parties which in turn favored him in bringing in customers and investors.
CENTRAL BUREAU OF INVESTIGATIONFortunately various other factors like global outlook and timely foreign collaborations also favored Bhansali for his success in his field. It was only when his capital grew from Rs.2 crores in 1992 to Rs.430 crores in 1996 there was a suspicion. Unfortunate times came over to Bhansali only during the mid 1996 where media played a major role in bringing to light the fraud activities which was being committed by the CRB group. Thus Chain Roop Bhansali was soon charged under various grounds like fraud, cheating, siphoning off funds from SBI and much more. An FIR was filed against CRB as per section 120B read with section 420 of the Indian Penal Code and section 13(2) read with section 13(1) D of the corruption Act. It was during this time the great swindler Harshad Mehta's scam was rolling among the public. But however people concentrated more on Harshad Mehta without realizing that there was also an equal imminent swindler Bhansali in the market whose foundation was already laid in 1991. Over a period of time Bhansali very cleverly transferred away the investor's money and raised it to about 1200 crores by attracting the public with various great deal of profit making investment schemes over a period of nearly 4-5 years. The most surprising fact is that how the major financial regulatory bodies like SEBI and RBI failed to perceive the possibility of the practice of sharp fraudulence taking place behind the rosy schemes.
BHANSAL'S EVIL INTENTIONED SCHEMES
Bhansali's evil intentioned schemes captured the people at a very high success rate and also because of the major financial bodies like RBI and SEBI which did not pay attention to the rate of fast growth of all the CRB firms. Impossible to explain enough, RBI had considered issuing an in-principle license for a bank to an unregistered finance company like CRB while the applications of well reputed giants like TATA and Birla were rejected. The next foolish thing done by the rating agency CARE which were not even able to smell that there was something wrong in the company and instead rated the CRB's with a three star rating of AAA. Only in 1996 things were not really favouring Bhansali when the market fell heavily and he was trapped in the deliberately cruel surrounding of raising the money from market and paying back on high interest rates. Besides, Bhansali was soon revealed when an SBI official without any intention discovered that he had duped SBI of Rs. 59 crores by issuing fake dividend warrants and converting them into money or encashing it.
LATER THE CENTRAL BUREAU OF INVESTIGATION ARRESTED BHANSALI
Once the scam was brought to light by the media, Chain Roop Bhansali escaped from the country to Hong Kong along with his wife Manjula, parents, sister and his two children. Later the Central Bureau of Investigation arrested Bhansali, but however they let go his wife Manjula free when who was in fact the director in CRB Capital Markets which has been at the centre of an immoral motive and tale of financial dishonest activities that left thousands of investors in CRB group companies stranded. The Central Bureau of Investigation has worked in a well organized and planned manner in regard to Bhansali's scam case. The CBI has not only registered case against Bhansali but also on few other officials of the State Bank of India for they have cheated the bank a huge chunk of money of about Rs 57 crores. The report submitted by the CBI clearly shows that the CRB Caps apparently used their accounts in SBI to take away out funds from the bank concealing the true nature of encashment of interest warrants and refund warrants of principal amount.
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