The Hindu Business Line : SEBI unearths another IPO scam in IDFC

SEBI on Thursday unearthed yet another abuse of IPO norms in the IDFC's initial public offering (IPO) where a few investors opened over 14,000 dematerialised accounts to corner large number of shares of the company.

This is the second such incident, after a similar such violations were detected in the YES Bank's IPO.

SEBI said in IDFC's IPO too four investors opened as many as 14,807 dematerialised accounts with Karvy-DP and "strangely", all these account holders have their bank accounts with Bharat Overseas Bank Ltd, Ahmedabad.

SEBI order said: "further probe is 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."

Reference is being made to the RBI to examine the role of BhOB, HDFC Bank, Indian Overseas Bank, ING Vysya Bank and Vijaya Bank in opening the bank accounts of these benami entities and apparently funding them.

According to SEBI, Karvy-DP, which was also named in the YES Bank IPO case, has not adhered to `Know-your-Client' norms, as per the reports of inspection submitted by NSDL and CDSL on the DP. Also, some of the documents collected by CDSL during the course of inspection show that Karvy-DP has obtained letters purportedly issued by the banks' concerned such as BhOB as proof of identity and proof of address of the person for the purpose of opening dematerialised accounts.

"It is seen that one branch manager has on the same date signed as authorised signatory of different branches of the bank. This raises a doubt as to the authenticity of the bank documents obtained by Karvy-DP for opening dematerialised accounts," the SEBI order by its Whole-time Director Mr G. Anantharaman said.SEBI also banned four investors (in whose names the multiple accounts were opened) viz., Ms Roopalben Nareshbhai Panchal (who was also named in the YES Bank IPO scam), Sugandh Estates & Investments P Ltd, Mr Purshottam Ghanshyam Budhwani and Mr Manojdev Seksaria from doing any kind of transactions in the securities market, till further directions.

Another 35 firms were also barred from participating in the IPOs in the future, till further orders, the SEBI order said.

More Stories on : Regulatory Bodies & Rulings | Economic Offences

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Batronics, Celebrity list at premium

Sirpur allots shares under abeyance to `rights' holders

Average returns lag for most Sensex stocks

Volatile market

Sterlite Industries betting on performance

SEBI unearths another IPO scam in IDFC

IIM Kozhikode's annual finance meet this weekend

SBI, Grasim buck bearish trend