Mumbai: Five years after the Dilip Pendse scandal rocked Tata Finance, the CBI filed a chargesheet against the former TFL managing director in July this year at a Mumbai court. CNBC-TV18 reports on how the Pendse scandal unfolded.

The CBI has unearthed irregularities in transactions entered the books of India Emerging Companies Investment Ltd, a Tata Finance subsidiary.

While, as per the book, IECI entered into a transaction of 2.15 lakh shares of Tata Finance with two broking houses in September 2000, paying Rs 1.95 crore at the prevailing rate of Rs 91 per share, CBI investigations reveal that the transaction never took place in September 2000. It alleges that the shares were in fact bought between March 30-31, 2001 and the transaction was backdated.

This is because the market had crashed by then in the wake of the Ketan Parekh scam, and TFL shares had slipped to Rs 35 per share. The CBI chargesheet says, both broking houses forged documents and prepared back-dated contract notes to suit the conspiracy allegedly on the orders of Dilip Pendse. The brokers'' ledgers show that they bought two lakh shares from five entities.

So who were these entities who sold Rs 35 shares for Rs 90 and made a killing. The CBI alleges that the five were entities controlled by the TFL MD Dilip Pendse and his associates. And that''s not all, according to CBI, IECL did not even have the money to finance the deal. The Rs two crore for the transaction came straight from Tata Finance. Pendse allegedly sanctioned an inter corporate deposit himself.

This was the time when Tata Finance had acquired 74 per cent stake in IECL. The company suffered losses of Rs two crore on account of this transaction. After the scandal broke out, Tata Finance filed a criminal complaint with the Mumbai police.

After two years, the probe was handed over to CBI. Meanwhile, the Delhi police too opened a probe against him. Pendse was in Tihar jail for 11 months. Despite repeated attempts, CNBC-TV18 could not a get a response from Dilip Pendse on the matter.