Font Size 
A dabba-full of stock mkt scams
Published on Wed, Jul 19, 2006 at 21:53, Updated on Thu, Jul 20, 2006 at 09:13 in 
Tags: 
Ahmedabad: All is not right with the Indian stock market.
Illegal share transactions, which is popularly called Dabba trading, is still a thriving business in Mumbai, Ahmedabad, Rajkot, Jaipur and Ludhiana long after the SEBI had banned it.
Sources say that though Dabba traders operate from dingy offices, this trade runs into thousands of crores of rupees.
In Ahmedabad, many such dingy offices have emerged as the new centres of illegal Dabba trading.
The dark side of this unauthorised stock trade is that it has undergone a technological makeover and paper notebooks have given way to hi-tech software.
Available for Rs 2,000 to 8,000 in Mehsana, Gujarat, this software deletes one zero from the number of shares entered for trade. So, if a broker keys in hundred shares, only 10 will get fed into the official exchange terminal. However, the Dabba traders' screen will still show 100 shares.
"Basically, Dabba trading is known to be prevalent in some parts of Western India. It is not a phenomenon all over India. And basically, Dabba trading is nothing but trading outside the system," says V R Rao, MD, Ahmedabad Stocks Exchange.
Investors flock to Dabba traders because they facilitate trade with only 10 per cent margin.
That means to buy shares worth Rs 1,000, an investor needs to deposit only Rs 100. However, it's not the investors who make money in this trade, but the brokers, who are quite often not even registered with a stock exchange.
"Hamne hamara malik ka share Mahipat Rai Chand Rashni Gandhi ko bechne ke liye diya. Kafi time tak usne humko uska paisa nahi diya. Paisa nahi dena pare ish liye forgery se hamara naam ka galat ledger account bana diya, jisme humne kabhi bhi NSE ya FNO ka koi trade nahi kiya tha. Phir bhi uska trade dekha ke hamara pura account debit kar diya. Sebi se verify karne ke baad pata chala ki aadmi illegal tha," (We had given some shares to certain Mahipat Rai Chand Rashni Gandhi to sell. For a long time, he did not give us the money. Later, to avoid paying us the money, he opened a forged ledger account in our name and even though we had never invested in any NSE or FNO, but he debited all the money showing trade on these accounts. Later when we verified with Sebi, he was found to be an illegal operator)," an investor, Pathan Rustam, who recently fell victim to a Dabba trader, said.
While it is difficult to put a figure to the voulme of transactions in Dabba trade, sources say it could be as high as 30 per cent of the transactions on one of the main exchanges.
Though SEBI has banned this trade, sources say Dabba trade is a thriving business in Mumbai, Ahmedabad, Rajkot, Jaipur and Ludhiana.
Dabba trade is an illegal business and SEBI has banned it. But the trade is flourishing in parts of Gujarat and Maharashtra.
| Ads by Google |
| Related Ads: | |
Read Comment | Post Comment
Be the first to comment.