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Our Bureau

Mumbai, Nov. 25 The time for redressal for investors who lost their money in the IPO scam is nearing.

Capital markets regulator SEBI has till date received a total sum of Rs 8.98 crore by way of disgorgement from 40 entities in the matter of irregularities in the initial public offerings during 2003-2005, according to a SEBI release issued on Tuesday.

It is learnt that the money will be disbursed once the corpus touches Rs 10 crore.

The Justice Wadhwa Committee — appointed to suggest ways and means to make good the losses incurred by investors in the IPO scam — has recommended that such compensation should be by way of money only and not by way of shares.

The compensation should be distributed from out of disgorgement proceeds, the committee said.

Now that SEBI has collected Rs 8.98 crore, the IPO applicants who have been duped by scamsters can look forward to early apportionment of the compensation amounts, said a person closely tracking the matter of IPO irregularities.

In the latest consent order passed by SEBI on November 24, Mr Hashmukhlal N. Vora, who acted as a financier to key operators for cornering shares in IPOs, paid Rs 2.53 crore towards disgorgement and settlement charges, said SEBI.

It also said no prosecution will be filed against Mr Vora regarding the alleged irregularities in the IPOs.

The consent fee includes around Rs 2.21 crore towards disgorgement of ill-gotten gains, Rs 22 lakh towards settlement charges, Rs 9 lakh towards compounding charges and Rs 1 lakh as legal expenses.

The IPOs were that of IDFC, IL&FS, Nectar Life Sciences Ltd and FCS Ltd.

SEBI’s had by an ex-parte order in April 2006 prohibited Mr Vora from transacting in securities till further orders.

More Stories on : IPOs | Economic Offences | Regulatory Bodies & Rulings

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