A MULTI-MILLION dollar racket involving the theft, forgery and resale of share certificates has been uncovered by police. Nine people, including six sub-brokers and two postmen, were reported to have been arrested over the weekend. As many as 780,000 share certificates of 185 companies, worth a total of more than 100 million rupees (about HK$25.3 million), have been seized. The shares were supposed to be from reputable companies - State Bank of India, Unit Trust of India, Reliance Industries, Dabur India, Bausch and Lomb, ACE Laboratories, World Digital Sound, Triveni Pool and Torrent Cables, among others. Deputy police commissioner Qamar Ahmed said: 'It was an ingenious racket, involving a complex network of sub-brokers, forgers and postmen. 'It might take us a few months to conclude our investigations. 'We have sent out some teams into the city to investigate the case and we expect that more arrests will be made during the forthcoming week.' The probe began when transfer agent MCS received 36,000 shares of Dabur India worth 17 million rupees for transfer. 'A couple of sharp people at MCS noticed that some of them were owned by the managing director of Dabur,' Mr Ahmed said. 'They counter-checked with the company, and it was found that the shares had never been put up for sale. Thus the fraud was discovered.' Following a complaint to the Crime Branch, police interviewed the sub-brokers involved who admitted that they had lost substantial amounts in a securities scandal in April 1992 and had hatched a plan to recover the money. Sanjay Mittal, 28, a sub-broker and managing director of Share Point Investment and Portfolio Private, was trapped when he sold 400 shares of ACE Laboratories and World Digital Sound to a decoy sent by the Crime Branch. 'Many original share transfer forms with signatures of the shareholders were found in Mittal's office,' Mr Ahmed said. 'But the lower halves of the forms, with the particulars of the transferees, had been torn away to avoid detection.' The operation involved affixing the signature of a genuine shareholder as the transferer on another form, attaching it to a fake share certificate, and then offering it for sale. Mittal's interrogation led to the arrest of eight others, and revealed that the network relied on two main sources. The first was the two postmen who intercepted envelopes containing share certificates and sold them to the sub-brokers at five per cent of the market value. The sub-brokers would sell the shares to other sub-brokers on a 'non-guarantee' basis, charging 25 per cent of the market price. In cases where the original signature of the shareholder was available, the shares were sold at market price by forging the signature on a fresh form. The other key link was Ashkaran, a computer operator at MAS Services, another share transfer agency. He had access to original share stationery, and used to duplicate shares on it. One copy was for the person making the allotment and the other passed on to the sub-broker to float on the market. In February last year, five people were arrested for allegedly printing fake share certificates in New Delhi.