Stan Chart alleged of issuing fraudulent securities

Posted By: Religare
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Stan Chart alleged of issuing fraudulent securities
Some of the High Networth Individual (HNI) clients of the UK based Standard Chartered Bank, which also has a significant presence in India, has came up with complaints regarding material mis-representation by the bank.

The bank has issued certain debt securities to some private banking individual clients with a buyback option.

However, towards the end of the last fiscal, when some of the clients tried to sell the securities back to the bank, it declined such transaction as similar activity is not permitted under the existing regulations of the Reserve Bank of India (RBI).

At present, buyback of corporate bonds can happen only between institutions like banks and bond houses that are regulated by the RBI. However, nearly Rs 150-200 crore of such securities has been sold by Standard Chartered"s relationship managers to their individual clients by mis-representing them as a buyback instrument.

Read more about: rbi, bank, shares, investment
Story first published: Monday, May 2, 2011, 9:30 [IST]
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