Financial Daily from THE HINDU group of publications
Saturday, Dec 17, 2005
Financial Daily from THE HINDU group of publications Saturday, Dec 17, 2005 |
|
|
|
|
|
|
|
Home Page
-
IPOs Markets - Economic Offences Money & Banking - Private Banks Karvy-DP calls for deeper probe into other IPO allotments C.R. Sukumar
Hyderabad , Dec 16 EVEN as the Indian stock markets were taken aback with the Yes Bank IPO allotment scam unearthed by the SEBI on Thursday, Karvy Depository Participant (DP) has said that such IPO allotment scams were not ruled out. The market regulator has cracked down on alleged manipulation in the share allotment process by use of benami demat accounts to secure maximum number of shares in the case of the Yes Bank IPO. The SEBI probe has uncovered a single investor with 6,315 demat accounts and another with 1,315 demat accounts. The regulator, after its initial probe into the Yes Bank IPO allotment process, has directed the National Securities Depository Ltd (NSDL) to undertake a comprehensive inspection of Karvy-DP focusing on the systems and procedures and identify the deficiencies in implementing the `know your client' norms that the DPs are required to follow. According to the Karvy group Chairman, Mr C. Parthasarathy, similar benami demat accounts with a good number of depository participants across the country could have been used in several other IPOs in a similar manner for cornering a major chunk of shares, which now calls for a deeper probe. "This is because the failure lies in the system itself. Nothing went wrong on our part in the due diligence exercise. Nothing seemed suspicious since these demat accounts using the same address were opened over a period of more than a year. In fact, even the external auditing firm appointed by us for conducting concurrent audit also did not smell any lapses in our systems and procedures," Mr Parthasarathy told Business Line. According to him, the same address can be used for opening several demat accounts in many occasions such as power of attorney, Internet accounts, loan applications, advisory applications, and sub-brokers. There is no bar on an individual investor opening multiple demat accounts, either with one or more DPs, he added. "The depository system needs to be further tightened and made foolproof. The introduction of unique identification number to the investors will solve all the problems," Mr Parthasarathy said. He also said that Karvy-DP was mulling over the option of voluntarily furnishing details of all the applicants in IPOs with the same contact address on a regular basis to the regulator, irrespective of whether those applicants were allotted shares in the IPOs or not. Further, Karvy-DP is also thinking of digging the records of past IPOs to ascertain whether multiple applicants with the same address exploited the loopholes in the system.
More Stories on : IPOs | Economic Offences | Private Banks
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|