ACKNOWLEDGEMENT

We would like to express the greatest appreciation to our

principal Mrs. Madhu Wadke and to our Business Studies teacher
Mr. Vishwanath J. who gave us a wonderful opportunity to work
on this project.
TABLE OF CONTENTS

1) Background and Overview ……………….. 1

2) Key Players
2.1) Telgi, Gote & Yadav ......................…........2
2.2) Anna Hazare, S,S, Puri & R.S Sharma..….3
2.3) Sridhar Vagal & Chaggan Bhujbal..............4

3) Analysis of the Cause .....................…..........5

4) Investigation and Prosecution.......................6

5) Impact on the Financial Sector......................7

6) Public Opinion and Media Coverage............8

7) Comparison with Other Scams .....................9

8) Conclusion ................................................... 10

9) Bibliography .................................................11
 Background and Overview
of the Telgi Scam
The Telgi stamp scam can be dubbed as the mother of all scams and many
cannot resist saying it happens only in India. Its ramifications run deep and
cover over 12 states with Maharashtra leading the way. It has left its stamp of
shame on the top police brass, politicians and bureaucrats. Today a number of
them, including the ex-police commissioner of police, Mumbai are languishing
in jails along with the kingpin, and state’s strong man resigned as cries to boot
him out reached a crescendo. Abdul Karim Lad Saab Telgi’s story is that of the
rags to the riches. He started by selling articles on the Belgaum platform and
trains to make out a living and educate himself and by doing a petty job. He
struck gold when he plunged into printing and selling fake stamps. His
operations lasted for nearly a decade and during this period he was able to keep
the law at bay by bribing the powers that pulled the strings.

He started be doing what has been even impossible to think of. He penetrated
the confines of Indian Government’s Nashik Security Press where millions of
crores worth court stamp papers and printed in connivance with the top
officials. He bought scrap stamp printing presses in working conditions,
installed them in his Mumbai Press and began printing and selling stamp
papers. What helped and boosted his sales was that by pulling his political
strings he succeeded in getting a stamp vendors license. This enabled him to
sell in bulk top companies and banks. Soon his growing money power gained
him so much clout at Mumbai Stamp Office that for long periods they feigned
shortage of stamps, allowing Telgi’s men to sell stamps at a premium outside
the stamp office.

The scam was eventually uncovered in 2001, following a series of raids and
arrests, and a massive investigation was launched to bring those responsible to
justice. The scam resulted in several high-profile arrests and convictions, and
also led to a number of reforms and improvements in the financial sector to
prevent similar scams from occurring in the future.
 Key Players
Abdul Karim Lad Saab Telgi :
In his early forties, is keeping the police force of at least 19 states on
tenterhooks. The main suspect in the fake stamp paper racket is a native
of Belgaum district in Karnataka. He began as a vendor in a small railway
station before coming to Mumbai. A meeting with a forger eventually led
him to the stamp and stamp papers business where demand forever
exceeded supply. He capitalized on this by printing duplicates. No one has
determined the extent of his business or the loss to the exchequer, but it
is believed to run into thousands of crores. Arrested in 2001, Telgi is now
behind bars in Karnataka. Among those who reportedly helped Telgi were
several politicians, policemen and bureaucrats.

Two MLAs - Anil Gote (Dhule, Maharashtra) and Krishna Yadav

(Himayat Nagar, Andhra Pradesh) - have been arrested and charged
under the Maharashtra Control of Organized Crime Act. Apparently,
Gote helped Telgi get a stamp vendor's license using a recommendation
from former Maharashtra chief minister Vilasrao Deshmukh. Yadav, it is
believed demanded Rs 2 crore to protect his illegal business. Though
Telgi's business empire was controlled from Mumbai, the Maharashtra
government never showed much enthusiasm to expose or end the racket.
 Noted social reformer Anna Hazare filed
a PIL in the Bombay high court to force the
state government to act.
Today, the investigation is out of the hands
of the state government and is monitored by
the court. Some believe that to be reason for
the arrest of some very high profile people.

On the court's orders, retired additional DGP

Sukhwinder Singh Puri was appointed head
of the Special Investigation Team probing the
racket, as its then chief, DIG Subodh Jaiswal,
was junior to cops who were under scrutiny.
Known as 'Justice Puri’ in police circles, Puri
enjoys the reputation of being an upright
officer. It was after he entered the picture that
the accused began emerging from the shadows.
He has shunned the media glare and
steadfastly stuck to his work.

Former Mumbai police commissioner R

S Sharma is the highest ranking officer to
be arrested so far. The SIT says he did not
maintain absolute integrity in the
investigation into the scam
 Retired ACP M C Mulani reportedly demanded a bribe from Telgi.
Despite knowing this, Sharma let him continue in the team
investigating the scam.

IGP Sridhar Vagal is the second highest

ranking officer to be arrested. Among
other things, he reportedly allowed Telgi a
free rein even when he was in police
custody. At that time, Vagal was working
under Sharma in Mumbai.

Maharashtra Deputy Chief Minister

Chhagan Bhujbal finds himself in a soup
because he had appointed Sharma as
Mumbai police chief. Even at that time, it
was known that Sharma's role in the
racket was not entirely above board.
He has often found himself isolated
where this racket is concerned with no
support forthcoming from his party,
Nationalist Congress Party, either.
There is no talk of any connection
between him and Telgi as yet, but until
Sharma is absolved, Bhujbal will continue
to be viewed with suspicion.
 Analysis of the Cause
The Telgi scam was the result of a combination of factors, including
corruption, flaws in the security system, and a lack of oversight and
regulation. One of the key factors was the absence of proper security
measures for stamp papers, which allowed Telgi to manufacture and
distribute counterfeit stamp papers with ease. The government
agencies responsible for issuing and selling stamp papers were not
equipped to detect the counterfeit products, and there were no
reliable systems in place to verify their authenticity. Another major
factor was the widespread corruption in the system. Telgi had
connections with several high-ranking officials and police officers,
who provided him with protection and allowed him to operate his
fraudulent activities with relative impunity. He was also able to bribe
and influence government officials to obtain licenses and approvals
for his operations. In addition, there was a lack of regulation and
oversight in the financial sector, which allowed the Telgi scam to go
undetected for several years. The government and financial
institutions failed to detect and prevent the scam, and there was no
mechanism in place to track and monitor fraudulent activities.
Overall, the Telgi scam was the result of a systemic failure of the
financial system, characterized by corruption, security weaknesses,
and a lack of regulation and oversight. The scam highlighted the
need for reforms and improvements in the Indian financial sector to
prevent similar scams from occurring in the future.
 Investigation and Prosecution
The investigation and prosecution of the Telgi scam was a long and
complex process, involving multiple agencies and jurisdictions.
The initial investigation was carried out by the Central Bureau of
Investigation (CBI), India's premier investigating agency,
following raids and arrests in 2001. The CBI conducted a wide-
ranging investigation, gathering evidence and questioning
witnesses, and was eventually able to build a case against Telgi and
his accomplices. The prosecution of the case was handled by the
Special Court for Economic Offences in Mumbai, which was set up
specifically to deal with cases of financial fraud. The trial was a
lengthy and high-profile one, with several prominent witnesses and
accused appearing in court.

In 2007, Abdul Karim Telgi was convicted and sentenced to 30

years in prison and fined over Rs. 200 crores (approximately USD
40 million) for his role in the scam. A number of other accused
were also convicted and sentenced, including several highranking
officials and police officers. The investigation and prosecution of
the Telgi scam were widely hailed as a victory for the Indian
justice system and demonstrated the government's commitment to
combating financial fraud and corruption. The case also led to
several reforms and improvements in the financial sector, including
increased security measures, better regulation and oversight, and
enhanced anti-corruption efforts.
 Impact on the Financial Sector
The Telgi scam had a significant impact on the Indian financial sector,
including the government, banks, and insurance companies.
One of the biggest impacts of the scam was the loss of billions of
rupees in revenue to the government, banks, and insurance companies.
The counterfeit stamp papers were widely used in financial
transactions, and their widespread circulation resulted
in significant financial losses. The scam also had a negative impact on
the credibility of the Indian financial system, 2exposing major flaws
in security, regulation, and oversight. The involvement of high-
ranking officials and police officers in the scam also damaged public
trust in the government and law enforcement agencies.
In response to the Telgi scam, the Indian government took a number
of measures to prevent similar scams from occurring in the future.
One of the key measures was the implementation of better security
measures for stamp papers, including the introduction of new, tamper-
proof stamp papers and the use of advanced security features to
prevent counterfeiting. Another measure was the introduction of
stricter regulations and oversight in the financial sector, including the
establishment of a dedicated agency to monitor and investigate
financial fraud. The government also implemented a number of
anticorruption measures, including the strengthening of laws and
penalties for bribery and corruption.
In addition, the government launched a major awareness campaign to
educate the public and businesses about the dangers of financial fraud
and the importance of verifying the authenticity of financial
documents. This helped to raise awareness of the issue and
encouraged greater vigilance in financial transactions.
Overall, the Telgi scam had a significant impact on the Indian
financial sector and led to several important reforms and
improvements. The measures taken in response to the scam helped to
strengthen the security and reliability of the financial system and
prevent similar scams from occurring in the future.
Public Opinion and Media Coverage
Public opinion and media coverage of the Telgi scam was intense
and widespread, with the issue garnering significant attention in
the Indian press and among the public. The high-profile nature of
the scam, with its links to corrupt government officials and police
officers, and the massive financial losses incurred, made it a major
news story and a topic of public concern. The media extensively
covered the investigation, trial, and conviction of Abdul Karim
Telgi and his accomplices, and the case received widespread
attention in both national and regional media. Public opinion was
largely one of anger and frustration, with many people expressing
disbelief that such a large-scale scam could have gone undetected
for so long. There was also widespread criticism of the
government and law enforcement agencies for their failure to
detect and prevent the scam, and many people called for reforms
and improvements in the financial sector. The media coverage of
the Telgi scam played an important role in raising public
awareness of the issue and highlighting the need for reforms and
improvements in the Indian financial system. The intense public
scrutiny of the case also put pressure on the government and
financial institutions to take action and implement measures to
prevent similar scams from occurring in the future. Overall, the
Telgi scam was a major issue in India, attracting significant public
and media attention. The coverage of the scam helped to shed
light on the issues surrounding financial fraud and corruption and
played an important role in catalysing reforms and improvements
in the Indian financial sector.
 Comparison with Other Scams
The Telgi scam was one of several major financial scams that have
taken place in India and globally. While it was a significant scam in its
own right, it had similarities and differences with other major
financial scams in terms of magnitude, causes, and impact.
Compared to other major financial scams in India, such as the
Harshad Mehta scam in the 1990s and the Satyam Computer Services
scandal in 2009, the Telgi scam was relatively smaller in magnitude.
However, it was significant due to the widespread use of counterfeit
stamp papers and the involvement of corrupt government officials
and police officers. The Harshad Mehta scam involved large-scale
manipulation of the Indian stock market and resulted in financial
losses estimated to be in the billions of dollars. In comparison, the
Telgi scam was smaller in scale but still significant, with financial
losses estimated to be in the hundreds of millions of dollars. In terms
of causes, both scams were facilitated by a lack of regulation and
oversight, weak security measures, and the involvement of corrupt
individuals. However, the Harshad Mehta scam involved a wider
range of actors, including banks, brokers, and government officials,
and was able to take place due to systemic weaknesses in the Indian
financial system. In comparison, the Telgi scam was focused primarily
on the production and sale of counterfeit stamp papers. The impact
of both scams was significant and resulted in financial losses, damage
to the credibility of the financial system, and a loss of public trust in
the government and law enforcement agencies. Both scams also led
to reforms and improvements in the financial sector, including
increased security measures, better regulation and oversight, and
enhanced anti-corruption efforts.
 CONCLUSION

In conclusion, the Telgi scam was a significant financial

scam that took place in India in the early 2000s. The scam
involved the production and sale of counterfeit stamp
papers, which were widely used in financial transactions.
The scam was facilitated by a lack of regulation and
oversight, weak security measures, and the involvement of
corrupt individuals, including government officials and
police officers. The impact of the Telgi scam was
significant, resulting in financial losses, damage to the
credibility of the financial system, and a loss of public
trust in the government and law enforcement agencies.
The case also led to reforms and improvements in the
financial sector, including increased security measures,
better regulation and oversight, and enhanced anti-
corruption efforts. The Telgi scam serves as a reminder of
the importance of effective regulation and oversight,
strong security measures, and the role of public vigilance
in preventing financial scams. The case highlights the need
for continuous efforts to improve the integrity and stability
of the financial system, in order to protect the public
interest and promote public trust.
 BIBLIOGRAPHY

1."Telgi scam: Background, Causes and Impacts" by Deepak

Venkatesh (Economics and Political Weekly, 2003)
2. "The Telgi Scandal: A Study in Organized Crime" by S.B. Agnihotri
(Economic and Political Weekly, 2005)
3. "The Telgi Scam: A Study of Corruption and Systemic Failure" by S.
K. Das (Journal of the Indian School of Political Economy, 2006)
4. "Counterfeit Stamp Scandal: The Telgi Scam" by Sharmila Kantha
(Economic and Political Weekly, 2005)
5. "The Telgi Scam and Its Impact on the Indian Financial System" by
S. K. Chakraborty (Journal of Financial Crime, 2006)
6. "The Telgi Scandal: A Study of Financial Fraud and Criminal
Enterprise" by S. K. Biswas (Journal of Financial Crime, 2007)
7. "Financial Scams in India: The Telgi Scandal and Beyond" by S. K.
Mishra (Journal of Financial Regulation and Compliance, 2008)
8. "The Telgi Scam: Lessons Learned and the Way Forward" by S. K.
Pathak (Journal of Financial Crime, 2009)
9. https://frontline.thehindu.com/the-nation/article30221420.ece
10. https://indiankanoon.org/doc/149876113/