Four investment banks — SBI Caps, Kotak Mahindra, Deutsche Bank and HSBC, have come under fire from the government for taking up the job to manage the Tata Steel’s follow-on public offer when they were assigned to do similar work for State-run SAIL.

Terming the action of these banks as “unethical”, the Steel Minister, Mr Virbhadra Singh, said, “Yes, we are unhappy about it. I don’t know if they can do like this? Certainly, this is unethical“.

Indicating that the Government is contemplating action against the said banks as they had first got the job from SAIL, Mr Singh told presspersons here on Monday that “if it entails changing the merchant bankers, there will be some delay (in SAIL FPO).”

“We engaged them (the merchant bankers) first ... Why Tatas chose to come on same time with same merchant bankers is for them to explain, it is for the banks to explain,” the Steel Minister said, adding that SAIL Chairman, Steel Ministry and Department of Disinvestment are associated with it (the issue).”

However, Tata Steel disagreed with the view of the Steel Minister.

“That’s what he (Steel Minister) said ... As far as my view is concerned, it is up to the bankers to decide,” Tata Steel Director, Mr Jamshed J. Irani, told PTI.

Meanwhile, a senior government official confirmed that notices have been sent to the banks, adding that, “it is purely conflict of interests. They have been asked to reply in the next 2-3 days and then we will take a decision in this regard (whether to change the merchant bankers for SAIL FPO).”

The FPO is expected to hit the capital markets in mid-February.

When asked how same merchant bankers are managing the issue of two largest domestic steel companies, SAIL Chairman, Mr C.S. Verma, however, refused to join the issue.

“That you ask Tata Steel ... I cannot comment on this issue,” he said.

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