Indian fake share certificates racket rocks investors

BOMBAY has been rocked by news of the latest scandal to hit the stock market - a multi-million rupee fake share certificates racket that could hit innocent investors hard.

The name of Harshad ''Big Bull'' Mehta has been indirectly associated with the racket.

On Saturday, New Delhi police arrested five people who they said dealt in fake shares of blue-chip companies by delivering and circulating share certificates allegedly printed in Delhi.

Fake shares worth 20 million rupees (about HK$5 million) were seized.

Police said fake share certificates with a market value of 90 million rupees had been pumped on to share markets of several cities since in late 1991.

Deputy Police Commissioner P.K. Shrivastava said: ''If this racket had not been detected . . . the total fraud perpetrated on innocent and gullible investors would have run into hundreds of crores [billions] of rupees.'' The counterfeit shares, floated in the markets of Bombay, New Delhi, Surat, Ahmedabad, Agra, Noida in Uttar Pradesh and Moradabad, were issued in the names of pivotals such as Reliance Industries, Larsen & Toubro, Hindustan Lever, Hindustan Ciba Geigy, Unit Trust of India's Masterplan, and the State Bank of India's Magnum.

Apart from several hundred investors, some banks, including foreign ones, are believed to have been defrauded.