The Hindu Business Line : IPO scam-hit may get back monies

Correction course
Rs 116 crore disgorgement amount to be deposited in a separate account
Details to be collected to decide on who will get how much

Mumbai , Nov 22

SEBI, which has ordered two depositories and eight depository participants to pay up a "disgorgement amount" of Rs 116 crore, believes that there are ways in which this amount can be given back to those who may have suffered opportunity loss in the IPO allotment scam.

However, the SEBI Chairman, Mr M. Damodaran, said on Wednesday that disgorgement and restitution being "two different steps", it is not required at this stage to spell out who will get how much from the disgorged amount.

He said the present order deals only with disgorgement. Once the amount is received in the separate account created for the purpose, the regulator may go into the aspect of restitution.

SEBI passed the disgorgement order on Tuesday against the depositories and DPs, saying they had unjustly gained from the IPO allotment scam.

He said there are IPO applicants who have not received any allotment of shares and those who have got less than what they might have got, had no scam taken place. Once these details are collected, SEBI can address the matter of restitution.

Whatever money remained after restitution would be deposited with the Investor Protection Fund, but that would be the last step, said Mr Damodaran.

The entities that have been ordered to pay the disgorgement amount can appeal to the Securities & Appellate Tribunal.

"SEBI's order is being imposed on joint and several liability because the entire scheme/artifice was one large fraud where several entities either deliberately closed their eyes when the wrongdoers perpetrated their illegality or were actively involved in the transactions," said Mr Damodaran.

"There may be other entities that were parties to the scam but outside of SEBI's net. But the entities named in the order are free to seek settlement from other parties that may be involved. These other parties could be financiers, master account holders, key operators and other violators. It is not in the interest of the public that the regulator should spend its time in deciding private disputes between various perpetrators of the IPO fraud/cornering of shares."

MARKET SURVEILLANCE

SEBI's new integrated market surveillance system will go live from December 1.

The system will enable the regulator to get market data on real-time basis from stock exchanges, clearing houses and depositories.

The system will enable SEBI to analyse information on market transaction immediately and develop parameters that will generate alerts highlighting abnormal market movements.

This will be in addition to, and not a substitute for, the surveillance activities being carried out by stock exchanges.