Loan scam probe creates scare as CBI seizes 28 a/cs

The cash-for-loan scam is likely to affect investors as the Central Bureau of Investigation (CBI) has seized at least 28 bank accounts of Money Matters (India) Pvt Ltd , which includes the Rs445 crore the company had raised in October by selling shares.

Money Matters had sold over 71 lakh shares for Rs625 each to Qualified Institutional Investors (QIP). The investors include some foreign players who were impressed by the rapid growth projected by the company in the last few years, apparently on the back of the boom of the real estate sector.

The positive response shown by the investors took the company’s shares to an all-time high of Rs787 on October 29. The company reportedly parked the money raised in fixed deposits in banks to use for future growth.

“We have seized all the bank accounts of the company and its arrested officials,” said a senior CBI official involved in the investigations. Experts say that the investor’s money might now get struck for a long time, as the criminal probe will take months to complete.

The economic offences wing (EOW) of the CBI had busted a multi-crore cash-for-loan scam late last month in which five senior officials of public sector banks were arrested along with three people representing Money Matters, a financial agency facilitating procurement of loans to corporates.

All the eight were ordered to be released on bail by a special CBI court on Friday. However, three accused from Money Matters were arrested again on Saturday in other cases.