Financial Daily from THE HINDU group of publications
Saturday, Jan 14, 2006
Financial Daily from THE HINDU group of publications Saturday, Jan 14, 2006 |
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Economic Offences Markets - IPOs Chidambaram promises action against YES Bank, IDFC IPO scam culprits Our Bureau
New Delhi , Jan. 13 THE Finance Minister, Mr P. Chidambaram, today said that stringent action would be taken against all those involved in the recent initial public offering (IPO) allotment scam in YES Bank and IDFC. Mr Chidambaram also assured prospective investors that all systemic deficiencies would be tackled to ensure against recurrence of such malpractices in the forthcoming new issues. "It is a systemic deficiency. Corrective steps are being put in place. For new issues, they (SEBI) are taking special care. There is no need to worry about new issues. I have already spoken to the SEBI chairman and depositories," Mr Chidambaram told reporters. He also said that the culprits in the multiple-demat scam, relating to the YES Bank and the IDFC IPO, have been identified. "We have identified the culprits who perpetrated the scam in both the issues. I am told that it is the same set of players and individuals - four to five individuals, same lead managers and the same couple of bank branch managers who are involved," he said. The Finance Minister said that all agencies would take stringent action against those individuals who distorted the IDFC and YES Bank issues. As regards what will happen to the allocation of YES Bank and IDFC issues, Mr Chidambaram said that SEBI was looking into this matter. Referring to his recent observation on the YES Bank IPO scam, Mr Chidambaram reiterated that he does not accept a system that does not detect multiple accounts from the same address. SEBI on Thursday said it had unearthed another scam, in the case of IDFC's IPO, where a few investors opened over 14,000 demat accounts to corner large number of shares. The capital market regulator said in an order that further probe was required for examining the systemic fault, if any, of the registrar Karvy-RTI i.e. Karvy Computer Shares P Ltd, and the lead managers - Kotak Mahindra Capital Company Ltd, DSP Merrill Lynch Ltd and SBI Capital Markets Ltd in identifying and weeding out the benami applications. SEBI has also decided to refer to the Reserve Bank of India to examine the role of Bharat Overseas Bank, HDFC Bank, Indian Overseas Bank, ING Vysya Bank and Vijaya Bank in opening the bank accounts of the benami entities and funding them.
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