I-T raids on brokers reveal proof of vast undisclosed wealth

I-T raids on brokers reveal proof of vast undisclosed wealth
PRANATI MEHRA

MUMBAI, MARCH 26: The Income Tax raids on six prominent brokers, including Ketan Parekh, former BSE chief Anand Rathi and Shankar Sharma of First Global, over the weekend have revealed evidence of staggering amounts of undisclosed wealth. In the case of one broker alone, the yearly turnover has been found to be Rs 20,000 crore. A group of firms owned by him has 90 chartered accountants on its rolls. The I-T now needs to find out how many of the transactions are their own and how many benami.

On a prima facie count, shares totally valued at over Rs 200 crore have been found from the offices of the brokers raided. With demat in operation for quite some time now, the stockpile of so many shares itself raises eyebrows, BSE observers say.

A huge discrepancy in Ketan Parekh’s profits for this year has also been detected. His statement has been recorded, sources said.

In the case of Rakesh Jhunjhunuwala, jewellery worth Rs 70 lakh has been put under prohibitory orders, sources said. Shares worth Rs 20 lakh have been seized, and four lockers are sealed. In all, 15 lockers of the Anand Rathi group are said to have been sealed.

In the case of Nirmal Bang, six lockers have been sealed.

The raids have also provided leads on alleged manipulation in the transactions of First Global Stock Broking Ltd. The manipulation, sources said, is in the form of First Global transferring out its profits and then recovering it in cash.

Sharma of First Global was not available for comment. Sources said he is in the US and the Income Tax department is likely to record his statement when he returns. In the meantime, his house and offices in the city and one house in Delhi have been sealed.

According to a statement issued by the Central Board of Direct Taxes today, the raids have resulted in the recovery of documents indicating undisclosed transactions. In one case, it is of the order of Rs 15 crore so far, the statement said.

Lockers located in four of these cases have been kept under prohibitory order. The material discovered includes substantial quantity of gold and jewellery, share certificates running into several crores, as well as evidence of share transactions running into thousands of crores.

Directorate of Investigation, Mumbai has confirmed there is a clear linkage of material discovered with an attempt to avoid disclosing income, the statement said.

Evidence available also indicates in some cases, fictitious purchase and sale of shares, resulting in trading-in of profits/losses. In one case, it is of the order of Rs 7 crore so far.