C R Bhansali

He wanted to be in the big league and used all possible means to get there. Result: his name figures among the top scamsters of India.  We are talking of Chain Roop Bhansali, who floated CRB Capital Markets Limited in 1985. The company depended on high cost financing, and Bhansali duped thousands of unsuspecting investors to raise almost Rs 1,100 crore, only to lose it all. That, however, does not take away from his intelligence. Surya Bhatia, Certified Financial Planner, Asset Managers, points out: “If you ignore for a minute the fraud he carried out, the man was brilliant. He caught the pulse of a bearish market and collected a lot of money.”

Since its inception in 1985, CRB Capital Markets Ltd went on to become a Non-Banking Financial Company (NBFC) in 1991. It was during a routine Reserve Bank of India (RBI) inspection that it was established that the company was misusing funds and misreporting income. Following this, in 1997, RBI filed a petition for the winding up of the company. At that point Bhansali had obtained a licence to start a bank as well, which was cancelled. His lawyer Kanther explains: “He stayed in jail for 90 days, but till now, no charges have been framed against him and we are fighting a case for the revival of the company.”

Finally, on December 15, 2010, a division bench of the Delhi High Court allowed CRB Capital Markets Limited to repay its small creditors. The court appointed a seven-member CRB Capital Markets Limited Disbursal Committee (which included Bhansali) headed by SK Tandon, a retired ADJ. Tandon informs: “It’s a big relief for the investors. The committee has been able to pay a sum of over Rs 9 crore to 3,944 depositors in the last few months. But we still have a long way to go.”

Bhansali now lives with his family in Mumbai, where one of his sons is training to be a finance specialist. After his empire fell, Bhansali, continued to practise as a consultant chartered accountant.  “He is doing his best to return the money of depositors as it is the only way to gain back his self-respect,” says Kanther.

Experts believe duping of investors at this level would not have been possible had the regulators - RBI and Securities and Exchange Board of India (SEBI) – not connived with Bhansali. It was only after the scam that the regulators woke up from their slumber, and new rules were put in place for NBFCs. While it is true the new regulations look after the interests of investors, there are many ordinary people out there who are still waiting to get back what is due to them from CRB.