The Hindu Business Line : IPO scam<br>I am a genuine investor being victimised: Shreyans Shah

THE Ahmedabad-based Lok Prakashan Group and its promoters named in the IDFC IPO scam as entities receiving lakhs of shares in off-market deals before listing claim that they are innocent.

"We are genuine investors and we are seeking legal opinion ahead of challenging the Securities and Exchange Board of India (SEBI) order barring us from future public issues. We were not given any opportunity to clarify our position," Mr Shreyans S. Shah, Managing Editor and Publisher of Gujarat Samachar, a popular vernacular daily of the Lok Prakashan Group, told Business Line here.

The Lok Prakashan Group, along with its promoters - Mr Shreyans S. Shah, Mr Bahubali Shah and Ms Smruti Shreyans Shah - have been barred from dealing in the shares of Infrastructure Development Finance Company (IDFC) Ltd and participating in any future initial public offering (IPO) issues.

The SEBI says its examination of the IPO dealings of Yes Bank and IDFC had revealed that certain entities had cornered IPO shares reserved for retail investors by applying in small quantities through thousands of `benami' or fictitious names.

After allotment, these shares were transferred through a series of off-market transactions to financiers, who, in turn, sold most of these shares on the day of listing and made a windfall gain of the price difference between the IPO price and the listing price, the SEBI investigation shows.

According to SEBI's preliminary findings, the Shah family and Lok Prakashan Group received 4,46,880 shares (3,35,160 to the company, 55,860 to Mr Bahubali Shah and 27,930 each to Mr Shreyans Shah and Ms Smruti Shah) in off-market deals before the listing.

Most of these shares were subsequently sold off on listing and as of now, these entities have only some shares of IDFC.

Interestingly, most of these shares had come to the Shah family's brokers from Ms Roopalben Panchal and Sugandh Estates and Investments Ltd, the prime accused in the scam.

"I do not know Ms Roopalben Panchal, either directly or indirectly, and have nothing to do with her. I was not aware that my share broker had obtained shares from her and transferred them into my account," Mr Shah said.