Monday, February 13 2006 17:37 Hrs (IST) - World Time -

New Delhi: In a breakthrough in the probe into the Rs 595-crore scam that shook the capital market, the CBI arrested the Director of DSQ software company Dinesh Dalmia here, ending a three-year search for him.

Dalmia, against whom an Interpol Red Corner Notice had been issued, was taken on a transit remand to be produced before the Additional Chief Metropolitan Magistrate (ACMM), Egmore, Chennai, where a case against him is pending.

The accused was nabbed late on Saturday night from a South Delhi location by the sleuths of CBI's Bank Fraud and Securities Cell.

He had fled the country in December 2003 and set up a base in the US after it came to light that his company's Rs 595 crore preferential allotment during the 2000-01 bull run in the stock markets was a fraud.

Dalmia, accused of criminal breach of trust, cheating and fraud, is alleged to have induced National Securities Depository Limited (NSDL) to dematerialise and credit 130 lakh equity shares of the software company as fully paid shares.

The 130 lakh shares were transferred allegedly by Dalmia to his front companies and entities without payment of sale considerations. These shares were then illegaly sold at stock exchanges through brokers notwithstanding the fact that these shares were unalloted or unlisted and prohibited for trading, the CBI charged.

Dalmia is accused by CBI of having misappropriated the sale proceeds of these shares amounting Rs 594.88 crores and diverted the money to group companies controlled by him.