CRB Group of Companies

CHAIN ROOP BHANSALI

Gaurav Sharma

4112009008
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SUMMARY
In 1997, scam resulted a loss of over Rs.1200 crores (Rs. 12 billion). Launched the finance company CRB consultants in 1985. Name of the company was changed to CRB capital markets and converted into a public limited company in 1992. Collected money from public through fixed deposits and transferred to companies that never existed. CRB capital markets raised Rs.176 crores in three years. Fraud came into existence when some cheques given to FD holders were dishonored. This reduced the faith of people in the company and other depositors started withdrawing and the all the cheques got dishonored.
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DUMMY COMPANIES
Set up dummy investment companies. Sell these dummy companies to buyers. Companies were registered because of his good contacts with registrar of companies and the controller of capital issues office. Listed the companies on stock exchanges. Used his own money to fluctuate prices to raise more money from market as: Bought his own stock through private finance companies owned by him. Used his other public companies to buy into each other as cross holdings.

THE SCAM
Cheques of few depositors dishonored and this news forced other investors to withdraw and all the cheques were dishonored. May 15,1997 The RBI had given Bhansali 72 hours to come up with a plan to repay his liabilities following over 400 complaints.

CBI locked and sealed the offices of the CRB Group and arrested six persons, including four directors.
The order prohibited CRB from selling, transferring, mortgaging or dealing in any manner with its assets and from accepting public deposits.

Bhansali sent a letter to the RBI not signed by him that the RBI order had led to the deterioration of the company's financial position.
Bhansali did not show up and CRB group collapsed.
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YEARWISE SHARE PRICE MOVEMENT

MONTHLY SHARE PRICE MOVEMENT

DAILY SHARE PRICE MOVEMENT

MARKET MOVEMENT

YEARWISE MARKET MOVEMENT

MONTHLY MARKET MOVEMENT

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AFTERMATH
The SEBI appointed an administrator for CRB's Arihant scheme finalized a scheme for payment to the unit holders in October, 1998. Under the scheme, the investors were prematurely paid Rs 4.95 per unit, which was its NAV as of 31 March 1998.

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