The SEBI board met on 2nd February to discuss the alleged failure of NSDL during the IPO scam of 2003-2005. There is no official word yet on what the Board has decided, only selective leaks
Stock market regulator, the Securities and Exchange Board of India (SEBI), held a Board meeting on 2 February 2010 to take a final decision on the alleged failure of National Securities Depository Ltd (NSDL) in preventing the initial public offer (IPO) scam during 2003-2005.
However, even after a full 24 hours later, there is no word from the regulator as to what has been decided in the Board meeting. There has been no press conference and neither is there a press release on what the board has decided. There have only been selective leaks to the media that the Board has exonerated NSDL. But there is no official communication as yet on an issue of utmost importance in proving the transparency and independence of the regulator.
The IPO scam goes back to 2006 when SEBI investigations conducted by the then chairman M Damodaran, unearthed that shares reserved for retail investors were illegally acquired by various entities through tens of thousands of fake dematerialised (demat) accounts and fictitious applications. From the facts, it appeared that NSDL was liable for poor oversight that allowed fake demat accounts to be opened. NSDL’s then head CB Bhave denied any responsibility for the scam even though the banks that had opened the fake demat accounts were penalised by the Reserve Bank of India (RBI).
A two-member bench was constituted to look into the scam after CB Bhave took over as SEBI chairman. The bench comprising G Mohan Gopal (director of National Judicial Academy) and former RBI deputy governor V Leeladhar passed an order against NSDL, directing it to carry out an independent enquiry to establish individual accountability for the failures of NSDL in the IPO scam.
This was followed by a one-year effort to bury the orders of the two-member bench. Finally, under pressure from a public interest litigation (PIL) filed in the Andhra Pradesh High Court, the SEBI Board met and was forced to release the three orders of the Bench into the public domain. But the Board sought to kill the application of the orders by declaring that two of the orders as void or 'non est' since the Bench had gone beyond its brief in criticising the regulator itself.
Dr Gopal had objected to this action taken by SEBI. His reservations were echoed by Justice JS Verma, former Chief Justice of India, who declared that such quasi-judicial orders can only be reviewed and quashed “by a judicial forum with requisite jurisdiction, at the instance of a petitioner with standing to seek relief.” Justice Verma is one of the most respected jurists whose opinions are not for sale.
It is reliably learnt that Justice Verma’s opinion was formally put before the regulator’s board meeting on 22 December 2009, which was headed by Mohandas Pai.
The SEBI board had also sought the legal opinion of C Achuthan, former presiding officer of the Securities and Appellate Tribunal (SAT), in relation to this matter. Dr Gopal had officially pointed out that Mr Achuthan’s position was conflicted because he had represented one of the IPO accused (Karvy) in a matter before the Andhra Pradesh High Court. Mr Achuthan is also a director on the NSE board, a SEBI-regulated entity. NSE is the promoter and major shareholder of NSDL.
There has been evidence that SEBI officials have worked overtime to protect Mr Bhave from the controversy, by delaying the proceedings relating to this case. It remains a mystery that if SEBI has exonerated NSDL entirely and rejected the two-member bench's order, why should there be no official communication?
The real-estate arm of Dubai-based ETA Ascon Star is launching an integrated township project near Chennai as it looks to tap strong demand for property in the country
Dubai-based developer ETA Star Property is set to launch the first phase of an integrated township project worth $250 million in India this year and is looking to tap the housing demand in the country, reports PTI.
The real-estate arm of ETA Ascon Star will launch an integrated township project near Chennai this year as it looks to tap strong demand for property in the country, the company's executive director Abid Junaid said.
The first phase of the project—one of three or four phases—is worth $250 million, he said.
"When it comes to property development itself, we are looking at India more aggressively and we believe there is potential," he said.
He, however, declined to give the total value for the project, which will take five years to complete. "There is demand for middle-income housing in India. There are plenty of home loans available and the interest rates are regulated by the government and the economy is growing," Mr Junaid said.
The project will be funded by local banks and pre-selling of property, he said.
The township will be in addition to similar smaller projects in Bengaluru coming up this year, he said, declining to give further details.
ETA Star will hand over four projects in Dubai worth more than two billion UAE dirhams ($544.5 million) to customers this year, but will not launch new projects, Mr Junaid said.
"Our focus is to deliver projects, which are under construction and have been launched earlier," he added.
The Tata-Gammon SEZ has failed to make any progress due to land-permission issues at the state level; uncertainty over the project continues
It has been more than two years and the special economic zone (SEZ) planned by the Tata Group and Gammon Infrastructure Pvt Ltd (GIPL) near Jamshedpur has not made any headway due to required permissions from the state government to acquire land.
“We have already announced this project to our markets as uncertain, because legally we are still not comfortable to proceed due to the land permissions that have (not) been obtained at the state government level,” said Parvez Umrigar, managing director, GIPL.
In 2008, the Tata Group joined hands with GIPL to develop the SEZ. The 100-acre SEZ was being planned as an auto-ancillary unit at Adityapur near Jamshedpur. The investment in the SEZ was estimated to be around Rs100 crore. Tata Group holds 51% in the proposed SEZ while GIPL and the Chhattisgarh state government hold 38% and 11% respectively. The SEZ was expected to be completed within two years from the announcement.
While most of the projects that GIPL has developed were either through 100% stake or a majority holding in subsidiary companies, this is a rare project where GIPL has a minority stake.
Commenting on the future of this project, Mr Umrigar said, “It is a small project; we will have to see whether we would be able to proceed further or not.”