Mumbai, November 9
The CBI here today arrested Harshad Mehta and two of his brothers for alleged transaction of 27 lakh shares in violation of a government order that all property of the “Big Bull” stood attached.

“We have arrested the three brothers - Harshad, Ashwin and Sudhir in Mumbai after the CBI’s bank securities and fraud cell found that the trio had been engaging in selling of 27 lakh shares fraudulently,” CBI spokesman S.M. Khan told reporters in New Delhi.

Mr Khan said the majority of these shares, belonging to blue chip companies, were allegedly sold by the three brothers in “benami names” and in the names of their relatives.

Giving details he said after the CBI registered a “missing shares” case in May, it was found that the shares had not been stolen at all but transferred in the market.

The special court, set up to try offences relating to transaction in the Securities Act, 1992, had directed the CBI to register a case and investigate the circumstances under which 27 lakh shares of about 90 companies were stolen or misappropriated, Mr Khan said.

The CBI took up the investigations by registering a case under Section 380 of the IPC. “During the investigations in the case so far the CBI suspects that these shares were fraudulently transferred in “benami” names and they had gone to the market with false documents which were created after transferring the shares,” the spokesman said.

The transfer of shares was done despite the government order that Mehta’s properties stood attached under the provisions of trial of offences relating to transactions in the Securities Act of 1992, he said.

The spokesman said on July 15, 1999, Ashwin Mehta had reported to the custodian that a large number of shares purchased by their firms were missing or lost and he was desirous of tracing and recovering these shares.

Ashwin requested the custodian to trace out and recover these shares and forwarded a list containing details about some shares, the spokesman said, adding that “Ashwin again submitted a revised list to the custodian stating that the earlier list was erroneous.”