CBI targets SBI, SEBI officials in M S Shoes scam

The Central Bureau of Investigation proposes to seek government sanction to prosecute certain State Bank of India as well as Securities and Exchange Board of India officials in the Rs 6.99 billion M S Shoes scam.

M S Shoes managing director Pavan Sachdeva would also be named as a main accused in the chargesheet, Bureau sources said.

The SBI officials involved, sources revealed, are general manager (capital markets) P S Malhotra and manager M S Netika Juneja.

The scam had closed down Bombay Stock Exchange for three days.

CBI investigations have revealed that SEBI permitted M S Shoes to collect 50 per cent of the application money on subscription, though the minimum stipulated amount was only 25 per cent. SEBI officials did not take any precaution to prevent this, nor did they instruct the Delhi Stock Exchange not to release the public issue funds to the company before the rights issue was complete.

It was alleged that Sachdeva, who was arrested by the CBI and subsequently released, misled investors and rigged the market to prop up his share prices.

UNI