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CBI seizes files on Cyberspace shares

CBI has seized all files regarding acquisition of over Rs 30 million worth of Cyberspace Infosys shares by General Insurance Company's mutual fund when their prices were falling in the share markets, the agency sources said in New Delhi on Thursday.

The sources said GIC's MF had acquired 35,000 shares of the Cyberspace Infosys Limited on June 24, 2000 when the company was not faring well at the stock market.

They said Arvind Johari , one of the directors of Cyberspace Infosys Limited, had allegedly used the services of Rakesh Mehta, a Bombay-based stock broker (already arrested), for bringing in investment from government investment institutes like GIC.

Mehta had allegedly arranged to buy a large chunk of Cyberspace shares through small companies, they said.

After the huge investment by Unit Trust of India and GIC's mutual fund, Cyberspace Infosys Limited witnessed a sudden spurt in investments and other small finance companies and even foreign investment institutes put their money into it.

The sources said some files of the GIC had been seized from Bombay and Lucknow and the sleuths were probing why an investment worth Rs 32 million was made into the company when its performance was not good.

The CBI sources said some officials of GIC would also be questioned soon in Lucknow and Bombay on the investments.

CBI has alleged that Johari had induced UTI top officials through Mehta to buy 3,45,000 shares of Cyberspace at an exorbitant price of Rs 930 per share, resulting in a loss of Rs 320 million to the financial institution.

CBI also suspects that the former UTI chairman has accounts in foreign banks and has begun investigation in that regard.

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