IPO Probe: Parliamentary Panel Unhappy With SEBI

NEW DELHI: A parliamentary panel has pulled up stock market regulator SEBI for not accepting its advice that all IPOs floated since 1999 be probed to detect any irregularities. SEBI had earlier probed 105 public offers that hit the markets during 2003-05 and found that some individuals and entities had manipulated the market for cornering shares meant for retail investors in 21 of these issues.

However, the parliamentary standing committee on finance wanted the market regulator to probe all IPOs since 1999 to bring out the exact number of scams. According to the action taken report on recommendations of the panel tabled in parliament on Tuesday, SEBI has said the earliest period during which the large number of fictitious accounts were opened was 2003.

Accordingly, it has examined the IPOs during 2003 to 2005. Besides, Sebi felt that its available resources and time would be better employed for finalising follow-up actions rather than in conducting probe into IPOs since 1999 which is unlikely to reveal involvement of any entity other than those already identified by the market watchdog. To this, the standing committee, headed by BJP MP Anant Kumar, said it would not like Sebi to prejudge the issue.

“Since the income tax department has in their submission to the committee hinted at the possibility of the prevalence of similar IPO irregularities since 1999, and RBI and CBDT have taken action for review of IPOs since 1999, the committee desire that Sebi should also undertake the exercise in this regard,” the report said.