The Hindu Business Line : Govt knows who's behind stock crash, says Shourie

"We have identified the people behind it. Some people worked in anticipation that the Government will give a 5-10 per cent discount from the last closing price when it announces the floor price."

New Delhi , Feb. 25

WORRIED over the tepid response to public issues in various companies, particularly IBP Co Ltd, the Government has said it knows the identity of the people responsible for pulling down stock prices and fixed the responsibility on financial advisors to motivate and inform the public.

After a meeting with financial advisors and market regulator SEBI to discuss the developments, the Disinvestment Minister, Mr Arun Shourie, told reporters here on Wednesday that he would bring this to the notice of the Prime Minister, the Deputy Prime Minister and the Finance Minister.

"We have identified the people behind it. Some people worked in anticipation that the Government will give a 5-10 per cent discount from the last closing price when it announces the floor price," Mr Shourie said. "I have informed the financial advisors for the six issues for sale of Government equity about these persons," he added without divulging the identity of persons.

The Minister evaded a reply on whether the Government proposes to take any action against these identified elements, but said the advisors must do the jobs entrusted to them. "The Government attaches great importance to the success of these issues. ... They (advisors) are our partners in this and it is their job to motivate and inform the investors," he said.

Despite the setbacks, Mr Shourie said the sale of residual equity in IPCL, CMC and IBP and partial disinvestment in DCI, ONGC and GAIL were on track. "The final offer price of the shares in these companies will not be based on the previous closing price of the scrip and will be determined on the strength of the company and expert advice. The prices will be fixed on a realistic basis. The Government will not go in for distress sale of shares in any of the companies," he asserted.

The Disinvestment Ministry was studying each and every issue separately and there could be many explanations for this kind of response.

"We assume the small investor is doing something and we try to discover his motives. But he is not doing anything. Only a few persons are trying to pull down the market," he disclosed.

"We expect the market to take cognizance of the situation," the Minister said.

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