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May 16, 2002 | 0635 IST
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Home Trade boss's Kolkata capers unravelled

BS Bureau

The controversial broking firm Home Trade held a series of meetings in the city with brokers and sub-brokers on the one hand and investment managers of exempted provident funds and co-operative banks on the other to solicit business from them in the recent past.

Smaller brokers operating on Lyons Range mainly as investment advisers to PFs and high net worth individuals were particularly targeted, said sources.

Among the exempted PFs, some of the bigger investment managers responded to the invitation.

The names of a couple of companies belonging to a large industrial house along with at least one public sector steel unit based in the region were among the major PF accounts tempted by the offer.

"We were invited along with some major PF managers to three or four Home Trade meetings where we were impressed by the excellent rates offered by the company," confessed a broker.

However, he did not sign up as a channel partner as he did not want to lose his direct customers to the high-profile brokerage.

"The terms of the deal, which involved profit sharing, did not appeal to me and my clients stood by me" he added.

Agarwal also tempted the brokers with a vision of building up a huge retail base of investors in partnership with them. "We were told that the advertising campaigns would bring in retail investors and the superior rates would convert them into customers. The company said it had managed to bag some major institutional businesses to keep the home fires burning till the retail investors signed up," said another broker.

The brokers were asked to get high net worth individuals to open margin-based accounts with Home Trade or its sister companies.

"Around 30-odd customers did actually sign up, each paying between Rs 30,000 and Rs 100,000," said the director of a family-run broking firm on Lyons Range.

"We also understand that investment managers were tempted with free margin-based personal trading accounts if they shifted some trades from their PFs to the company," he added.

While the customers have been left high and dry, no complaints have been filed with the police yet, according to the city detective department head Soumen Mitra.

"Although we have had some calls, no formal complaint has been filed", sources in a central investigative agency also confirmed.

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