After the SEBI unearthed the IPO scam, one question which remained unanswered was the source of funds which helped Roopalben Panchal and others to make thousands of IPO applications. The rumours that some big Gujarat based financiers are involved in the scam have now been confirmed by the CBI after conducting raids at multiple locations yesterday.
Retail investors have to pay the full value of their IPO bid at the time of submitting the bid. Hence, the funds requirement of Roopalben and others who applied under the retail category for many lakhs of shares would have been substantial.
Apparently, some of the big financiers readily financed small operators like Roopalben. After the shares were allotted, the shares were consolidated in a few demat accounts. A day prior to the listing, these shares were transferred to the demat accounts of financiers through off-market transactions. The financiers sold off the shares at a substantial profit after the lsiting.
The modus operandi of Roopalben and associates to open multiple accounts was very innovative. The lady advertised in some of the Gujarat dailies, offering to take free passport sized photographs. Copies of such photographs of unsuspecting individuals were used to open bank and demat accounts under fictitious identities. Only the address remained same for all these accounts, which was later tracked to a flat owned by Roopalben Panchal.
also see : CBI says Roopalben
and friends made Rs32 crore from the IPO scam