Published on Wed, Dec 30, 2009 at 09:47 | Source : Business Line
Updated at Wed, Dec 30, 2009 at 15:43
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IPO scam: Compensation soon for retail investors
Retail applicants who did not receive allotments in the scam-hit IPOs of 2003-2005 could yet stand to benefit, with the regulator proposing to initiate the distribution of illegal gains made by the scam perpetrators.
Retail applicants who did not receive allotments in the scam-hit IPOs of 2003-2005 could yet stand to benefit, with the regulator proposing to initiate the distribution of illegal gains made by the scam perpetrators.
The Securities and Exchange Board of India (SEBI) has identified 21 such IPOs, including that of IDFC, NTPC, TCS, YES Bank and Suzlon Energy.
SEBI on Tuesday said it proposes to initiate administrative steps for the reallocation of the disgorgement amount it had collected so far from various key operators, while also making public the Justice D. P. Wadhwa Committee Report, two years after it was submitted.
The committee, headed by former Supreme Court judge, Justice Mr Wadhwa, was constituted in July 2007 to advise on and recommend the procedure for the identification of persons who might have been deprived of allotment on account of the IPO irregularities, and the manner of compensation to them.
The totally unsuccessful applicants shall be paid first. The report has recommended that the amounts to be allocated will be computed as the "difference between the closing price of shares on the first day of listing/ trading on the NSE and the IPO issue price."
Every such applicant will receive the gains associated with the minimum shares allotted to the lowest category in the IPO.
