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COVER STORY: THE STOCK SCAM; SMALL INVESTORS
K.G.N. Pisharady, 68,
a retired PSU manager from Chennai, invested his PF and retirement
benefits in the stock markets, only to see the value of his investment
diminish.
When K.G.N. Pisharady
retired as deputy manager, port clearance, at BHEL in 1991, the provident
fund and retirement benefits had assured a peaceful retired life. With
three children to be married off, the conservative Pisharady wanted to
invest in a safe option. In fact he even went to a financial institution
to park his funds. But his adviser at the institution happened to be a
bullish broker who asked Pisharady to take a calculated risk and invest
in shares. Pisharady agreed. That decision cost him dearly. The retired
PSU manager has lost about Rs 2 lakh on the stockmarket.
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"The
Rs 2.6 lakh I had invested in stocks are now less than Rs 60,000.
The market defies sanity."
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While more than a dozen companies whose shares
Pisharady bought have vanished into thin air, the shares of other companies
like Pentafour, ICICI and Essar are quoting at abysmal prices. "I
was told that shares are a safe bet if I could study the market. Rigged
and manipulated, today's share market evades any sane study. Of the Rs
2.6 lakh I invested, I stand to get a mere Rs 60,000, that too if I am
lucky," says Pisharady. Forced to shelve his plans of buying a house
of his own, he now lives in a rented portion of a house. "I am resigned
to my fate. My dreams of owning a house are shattered," says Pisharady
who was never into shares while employed. Today, with virtually no income,
he does not dare to dream.
-Arun Ram
Ambuj Nath Kapoor, 43, a
Lucknow shopkeeper, lost Rs 5 lakh when the Cyberspace share fell
from Rs 1,900 to Rs 18.5 in a few months.
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| MONEY MIRAGE: Kapoor(left) outside
the Century office |
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"All
my lifetime's savings are gone. I don't know how to feed my family."
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I have no other
way but to end my life if I fail to get compensation from the government."
Sounds dramatically drastic? Not if you were Ambuj Nath Kapoor. Not if
you had bet Rs 5 lakh of your hard-earned money in a single company's
stock which rose to Rs 1,900 before plummeting to Rs 18.50 a few months
later. The company: Century Consultants AKA Cyberspace Ltd. Kapoor, who
runs a soft drinks shop in Lucknow's Hazratganj, was among the hundreds
of small investors who were blinded by the aura of power woven by the
local promoter Anand Krishna Jauhri. He invested nearly Rs 3 lakh in Century
Consultants on "badla-byaj" (loan for interest) and rest in
the form of shares. Encouraged by the rosy picture painted by Jauhri,
Kapoor even took a loan to start a new business.
To Kapoor the mere fact that Prime Minister
Atal Bihari Vajpayee laid the foundation stone for the information technology
park promoted by Cyberspace was enough. "Our lifetime's savings are
gone. My husband was to undergo an operation for cataract but we don't
have the money," says his wife Manju. Kapoor now trudges to the local
police station in the vain hope that Jauhri has been nabbed. But while
firs have been lodged and an inquiry instituted, it seems unlikely that
the 200-odd investors crowding the police station will get back the Rs
250 crore they had put in Cyberspace.
-Subhash Mishra
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