Story of Demat Scam

1,00,000 Bogus Demat A/c, Bank A/c, Cornering Small Investors· Portion Covering 53 IPOs· ² 5 Crore Shares

Presentation by Dr. KIRIT SOMAIYA Investors· Grievances Forum

IPO-DEMAT SCAM ± STORY OF SCAM ± SHAME
21st Century India is moving in the direction of becoming a Developed Country. Importance on the growth, Government investment in infrastructure from the year 2000 has changed the picture of Indian economy. Rs 1,00,000 crore Government spending on the core and infrastructure industries during 2001-03, has created a boom in the Indian Economy. Indian industries have gained self-confidence to compete with the world. The boom in the economy resulted in the boom in finance industry and that of Capital Market. It is unique in India that every bull run in the Capital Market has got supplemented by a scam. Harshad Mehta Scam ± 1992, the scam of CRBNBFC, the plantation companies and the Ketan Parekh Scam. Industries and finance sector always tried to tap the primary market during a boom. Mobilize the financial resources through Public Issues and IPOs. In 2004-05, more than Rs.24,000 crores have been mobilized from the primary market through Public Issues and IPOs. It is the sad part of the Indian Capital Market that every IPO boom has a scam. It was during 1986-88, the primary market momentum had a mini-scam of mini-steel plants and mini-cement plant public issues. These companies tapped the market, fooled the Small Investors, collected hundreds of crores of Rupees, diverted the funds. Small Investor was the loser. After the Harshad Mehta pick, once again the primary market got a momentum during 1995 to 1997 which resulted into the vanishing companies scam. Almost 1000 companies raised funds through Public Issues and got vanished. During the Ketan Parekh Scam, several companies changed their names from NBFC, finance companies to Infotech companies. Tapped the market. Several companies also created the hype and got benefited by higher premium.Small Investors the looser.

The IPO-Demat Scam of 2005 is in a way repetition of history. It is economic growth, booming economy, momentum to Capital Market and once again scamsters. Same mentality has destroyed the whole of the Indian finance/capital market regulatory network. It is just like a virus. Which has demolished, corrupted the banking system, depository system, Stock Exchanges,SRO,s Rregulatory network. The failure of surveillance and vigilance at every level from the Finance Ministry, RBI, SEBI, NSDL, CDSL, NSE, BSE, Banks, Depositories. In a single day, 10,000 bank accounts were being opened, nobody questioned. Same day 10,000s Demat accounts were opened, nobody gets suspicious. Is it possible? It is connivance. The scamsters, the syndicate corrupted the whole system. The Demat scam is the connivance of so-called Panchals, the broker, the investor, the banker and the DP. All came together to master-mind the scam, corrupted 53 Public Issues, siphoned off more than 5 crores shares of Small Investors. It is a tragedy on the part of the Indian regulators that the scam is going on since August 2004. Banks finance so-called Public Issue applications without even asking them to open a bank account. It is Bharat Overseas Bank, Citibank«« gave IPO finance of hundreds of crores of Rupees to a single person such as Roopalben-Syndicate in the name of tens of thousands of fictitious applicants/names. Karvy, the Depository, processed tens of thousands of applications, allotted them shares without even receiving applications.Investors¶ Grievances Forum is committed to protect the interest of Small Investors. The Small Investors demands justice. Losses incurred by the Small Investors due to the siphoning off of their shares by these scamsters be recovered from them. Be returned to those Small Investors/applicants. Five times penalties be levied. This may be deposited into the Investors¶ Education and Protection Fund. We want criminal action against the scamsters. Section 68A of the Companies Act is very clear and specific.´ To apply in Public Issues in a fictitious name is a crime, punishable with imprisonment up to 5 years. SEBI and the Government has to initiate criminal action. Here is a presentation on the Demat Scam. We appeal to all to teach a lesson to the scamster. Let us show the International Regulators, India, Indian Government, Indian Regulators also act like the Regulators of the Developed Countries. Take the issue to the logical end and get justice to Small Investors.

- KIRIT SOMAIYA

. with support of Banker & DP run the ¶Show-Scam· for 18 months. Zaveri·s. Budhwani·s & Sakseria·s. Failure of System ‡ Started in August 2004 ‡ Loot & Cornering Small Investors Quota by Syndicate of Broker. Sungandh Investments. DP ‡ Failure of Surveilance & Vigilance of Regulators ‡ 53 Ipo·s 5 crore Shares. along with the BrokerInvestors. Bank. 1 Lac Bogus Demat a/c The Roopalben. Investor.Story of Greed.

. Zaveri. Sakserias ‡ Story of Bharat Overseas Bank. ‡ Story of Karvy Registrar. Budhwanis.000 Bogus Demat A/c on the last day of IDFC issue by Karvy & Bharat Overseas Bank. Got alloted 1. RBI.BSE Connivance of all of te above made 43.Story of Panchals ‡ Story of Roopalben. DP.05. NSDL. City Bank. Roopalben & Budhwani were allowed to open 5. Stock Broker ‡ Failure of SEBI. Sugandh Investments.872 shares.982 applications in fictitious names in IDFC Public Issue.17. Indian Overseas Banks««. CDSL.

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‡ masterminded and executed by a coterie of operators acting in concert ‡ tout ensemble through the mechanism of front entities of name-lenders ‡ clear abuse of the very process of IPO. ‡ The syndicate ´sharedµ the ´Share Allotment Benefitµ Investor to get 50% of Bogus Allotment ² ¶Panchals· & Broker. craftily designed. meant to shore up the participation of small investors. Karvy put ² added further thousands application. . the Shell Investment Co·s remaining 50%.Mastermind to corner Small Investors Share ‡ The entire gameplan.

‡ IPO applicants merely name-lenders or non-existent ‡ These Bogus allottees transferred shares to Panchals. Budhwanis the Syndicate ‡ Transfer of shares before listing ‡ Sold shares on the first day of listing ‡ Windfall gain ‡ Elbowing out the genuine retail investors ‡ Bank in depositories allowed syndicate to open benami/ fictitious demat and bank accounts .SEBI Order on IDFC ‡ Thousands of applications in fictitious / benami names.

2005. Mutual understanding. ‡ Basis of allotment finalized on Aug 04. ‡ Shares got listed on the Stock Exchanges on August 12. 2005. 2005. 2005. before listing the Scamsters use to transfer shares to the Beneficiaries accounts. ‡ Yes. ‡ Shares credited to IPO allottees on August 05/06. .IPO of IDFC ‡ IPO of IDFC opened on July 15. Unsigned Moll. 2005 and closed on July 22.

Small Investors Portion/ Quota ‡ IDFC came out with public issue of 403.600. 34 per equity share . . ‡ 141.000 as per prospectus). 10 each for cash at a price of Rs.000 equity shares of Rs. 1.000 equity shares were to be offered to Small Individual Investors (defined as Individual Bidders who bid for equity shares for an amount less than or equal to Rs.260.00.

² 402-403.Transactions in IDFC Shares by Roopalben Panchal & Associates ‡ Roopalben have their demat a/c with Karvy Stock Broking Ltd. Ellisbridge. ‡ Panchals also have thousands of FictitiousBogus-Benami Demat Accounts & Banks A/C at the same address ² 34 Ketan Tower. Ahmedabad-380004. Gujarat College. C G Road. ² bank accounts with Bharat Overseas Bank. Opp. . Shahibaugh. Camp Road. Ahmedabad. Shashwat. Ahmedabad .

10181 demat a/c on 8 Aug .426 shares from 12. Ltd.412 shares from 1122 demat a/c·s on 8 August ‡ Roopalben also received 32. received 27.08.807 demat a/c·s on August 11 ‡ Purshottam Budhwani received 2.257 dematerialized a/c on 8 Aug ‡ Sugandh Investment Pvt.98.61.184 shares from 14.944 share.43.Roopalben Panchal & Others ‡ Roopalben received 39.

Bogus Demat a/c of Panchals & Others in IDFC Ms. Shri Purshottam Ghanshyam Budhwani Shri Manojdev Seksaria TOTAL 4748 1989 43982 Source: SEBI Order on IDFC ² Demat Scam . Roopalben Panchal 27064 Sugandh Estates 10181 and Investments Pvt. Ltd.

1 2 3 4 5 6 7 Demat A/c Opening Upto 15.04 18.No.04 19.Roopalben 12.08.257demat a/c-NSDL opened in 21 various batches on 21 diff. of Accounts 5990 2729 195 59 1001 1525 758 12257 .07.05 21.05 Total No.08.04 16.08.07.05 20.08.04 17. dates Sr.07.

Sugandh Invest Demat A/C opening .

04 10.06. 1 2 3 4 5 6 Demat A/c Opening Upto 15.07.10.Budhwani demat a/c opening Sr.06.05 14. of Accounts 670 424 40 18 142 2822 12257 .04 13.N o.05 15.05 Total No.08.06.05 22.

Bank asks so many documents and for Budhwanis. ´Red carpet for Budhwanis & Panchalsµ.Budhwani·s Banks A/C·s How a person is allowed to open so many accounts in the same Branch. . For a Small Investor. ´Khulja Sim Simµ.

Shares .Modus Operandi Yes. How they share to Benefit . this is the Syndicate.

Malad (W). 25/A 68 Gate No 6. Mumbai 95 .Office of Dummy ² Fictitious Investment Co. Malwani.

Kirit Somaiya visited the Benami Co. at Malawni Slum Area with the slum dwellers

Modus Opurendy-2

The Syndicate of ´Panchals, Broker ² Bogus ² Shell Co. & Investorsµ

Modus Opurendi for Firm Allotment
‡ Out of the above 2,54,828 applicants that had applied in the 1400 shares category and had received allotment in the IPO of IDFC, as many as 43,982 applicants representing 17.26% of the applicants of Roopalben, Sugandh, Budhwani and Seksaria appear to be fictitious Every applicant got allotment Also, the above suspected fictitious applicants had received IPO allotment of about 1,17,05,872 shares representing about 8.29% of the retail portion of 14,12,60,000 shares of the They apply for such a lot so every application will have allotment

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Dealing by 5 entity received share from Roopalben .

Mumbai 77 .Benami Applicant -The Bogus address ² 39. Kailash Niwas 2. Ghatkopar (E). Mehta Road.

064 to make offmarket transfers to her demat account ‡ Immediately prior to the scheduled listing on the stock exchanges ‡ It is simply fairy-tallish.064 A/C ‡ Can persuade all 27.Roopalben-Fairy Tale ‡ How an individual can open 27. .

Budhawani.Sakseria Broker Investors.Syndicate ‡ ‡ ‡ ‡ ‡ Panchals. Karvy-Registrar Bank Branch Managers & Management .Shell Co·s Karvy DP. Zaveri.

DP. Stock Broker.Karvy the Culprit ‡ Milibhagat with Syndicate-Panchals ‡ No details of Bank a/c & Refund mentioned in the Application forms ‡ Cheques issued with contineous serial numbers for thousands of aplicants ‡ Opened fictitious demat a/c ‡ Forms. thousands of forms incomplete. Applications processed ² allotted without receiving forms. details not available now ‡ Issued single refund cheque for thousands ‡ Of applicants ‡ Karvy the Registrar. . applicants not traceable.

‡ SEBI is directed to conduct immediately inspection of Karvy-RTI . sell in the securities market. Budhwani and Seksaria are not utilized for manipulation of IPO allotment in future.Order of SEBI ² Action on IDFC ‡ Panchals. directly or indirectly ‡ NSDL and CDSL to ensure that the demate a/c which served as conduit for Roopalben.Investors. Sugandh.Syndicate & Others directed not to buy.

‡Ritaben R Thakkar ‡Monal Y Thakkar ‡Page 46 of 49 ‡Vinod Modha ‡Kelan Atulbhai Doshi ‡Jitendra Lalwani ‡Lok Prakashan Ltd. Excell Multitech Ltd. directly or indirectly. Sugandh Estates & Investments P Ltd. till further directions: i. Tauras Infosys Ltd. Rajan Vasudev Dapki Bhargav Ranchhodlal Panchal Jayantilal Jitmal Seer Finlease Pvt. Ltd.‡ The following entities are directed not to buy. Roopalben Nareshbhai Panchal ii. Vora Welvet Financial Advisors Pvt. directly or indirectly. Ltd. iii. Shri Manojdev Seksaria SEBI Directives ‡ The following entities are directed not to buy. sell or deal in the shares of IDFC Ltd. ‡Bahubali Shantilal Shah ‡Smruti Shreyans Shah ‡Shreyans Shantilal Shah ‡Datamatics Telecom Ltd. ‡Dushyant Natwarlal Dalal ‡Puloma Dushyant Dalal ‡Amadhi Investments Ltd. Devangi Dipakbhai Panchal Hasmukhlal N. and in other ensuing future IPOs. ‡Dharmesh Bhupendra M ‡Biren Kantilal Shah ‡Suresh Bhikha Vasava ‡Javeri Gautambhai ‡Jay Shah . Ltd. till further directions: ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Zenet Software Ltd. sell or deal in the securities market. Shri Purshottam Ghanshyam Budhwani iv. Jayesh P Khandwala HUF Guatam N Jhaveri Shilpa Rajan Dapki Dipak Jashvantlal Panchal Hina Bhargav Panchal Bhanuprasad Dipakkumar Trivedi ‡Sujal Leasing Pvt. Ms.

Bharat Overseas Bank ‡ Connivance or Negligence ? ‡ Extending IPO finance to fictitious/benami individuals ‡ Providing intra day funding of margin money to brokers ‡ Extended huge amounts to the group through these fictitious/benami individuals ‡ The internal control system has failed to arrest the above irregularities ‡ Collection of account payee cheques of various individuals who are not the customers ‡ Crediting the proceeds of the refund orders to accounts other than the accounts of the payees .

RBI Findings ‡ Imposed monetary penalties for violation of RBI regulations on Know Your Customer (KYC) norms ‡ Breach of prudent banking practices ‡ facilitating misuse of IPO finance to ineligible borrowers. . ‡ Issued show cause notices ‡ RBI conclusion that violations were substantiated ‡ Accordingly the monetary penalties are imposed.

ICICI Bank Ltd.Reserve Bank of India Order Penalty levied on Following Banks ² ² ² ² ² ² ² Bharat Overseas Bank Ltd. Standard Chartered Bank . Indian Overseas Bank Vijaya Bank City Bank HDFC Bank Ltd.

i.Scam-Yes Bank IPO ‡ Issue opened on June 15.31. 2005 ‡ Listed at BSE & NSE July 12 ‡ Roopalben Panchal transferred 9.e.600 shares Roopalben had to apply for crores of shares ‡ Involving many crores of rupees in application money ‡ Observed that Roopalben Panchal·s name in the list of applicants/ allotees only once . prior to the listing ‡ In order to get an allotment of 9.600 shares to seven entities on July 11.31.

37.75 Crores Shares Reserved for Small Investors ‡ Rupalben cornered & sold 8.39.67.500 shares @ Rs 61.40 ‡ Rupalben & Syndicate earned profit of Rs 1.8000 .Yes Bank Issue ‡ Public Issue @ Rs 45 ‡ 1.

Bank A/cs ‡ Similar Addresses of Ahmedabad for Demat A/c ‡ On all applications similar address of Bharat Overseas Bank. Mumbai ‡ 9.250 shares allotment to these fictitious accounts . Demat A/cs.315 Bogus-fictitious applications.47.Gimmick of Roopalben in Yes Bank IPO ‡ 6. Worli.

2.32. Devangi Dipakbhai Panchal Zenet Software Ltd. 4. 6.Ltd.180 shares 2.20.590 shares 44. 5.05 to the following entities: ‡ ‡ ‡ ‡ ‡ ‡ 1.855 shares 80.000 shares 92. Seer Finlease P. Excell Multitech Ltd. Tauras Infosys Ltd.100 shares . Rajan Vasudev Dapki 3. 3.875 shares 1.07.61.Syndicate of Panchal-Investors ‡ Roopalben made off market transfers on 11.

. Excell Multitech Ltd. Rajan Dapki. ‡ Devangi Dipak Panchal.Roopalben & Investors ‡ Roopalben received funds from 8 entities ‡ Prior to the IPO of Yes Bank Ltd. Seer Finlease P Ltd. Taurus Infosys Ltd. Barghav Panchal (HUF) and Jayantilal Jitmal ‡ She in turn transferred these funds to 6315 entities who had utilized these funds for making applications in the IPO of YBL.. .. Zenet Software Ltd..

26.Sugandh Investment ² Yes Bank ‡ ‡ ‡ ‡ 1315 Bogus applications Allotment of 1.97.492 Modus-operandi similar to Rupalben .250 shares Profit of Rs 32.

Order of SEBI ² Action on Yes Bank ‡ Panchals & Others directed not to buy. ‡ NSDL is directed to undertake a comprehensive inspection of Karvy-DP ‡ NSDL and CDSL are advised to enhance their surveillance . ensuing IPOs. sell or deal in Yes Bank and other Companies Shares. directly or indirectly ‡ NSDL is directed to ensure that the 6315 demate a/c of Roopalben and 1315 demate a/c of Sugandh not utilized for manipulation of IPO in future.

Ltd.10. Roopalben Panchal Sugandh Estates and Investments Pvt. TOTAL 6483 4186 10.669 . 2004 Ms.669 Bogus demat a/c opened on 16 Aug.

Major Public issues 2003-05 .

Major IPO Bogus Applications .

In case of listed companies. 621 authorizes SEBI to file complaints for offences under the Companies Act. or b) Otherwise induces a Company to allot. or any other person in a fictitious name. ‡ Companies Act is clear on this under Sub-section (1) of Section 68A : ´Any person who : a) Makes in a fictitious name an application to a Company for acquiring or subscribing for any shares therein. 55A of Companies Act. provision of 68A is to be administered by SEBI. .µ ‡ As per Sec. shares therein to him.Criminal Action Demanded ‡ Criminal action against Panchals and others for opening bogus Demat and Bank Accounts. shall be punishable with imprisonment for a term which may extend to five years. or register any transfer of. Sec.

Sugandh Investment for these benami. forged applications. Panchals was transferring refunds belonging to thousands of bogus applicants with help of Electronic Clearing System directly in the bank accounts of Panchals & Others . ‡ More than 95% bogus fictitious Demat accounts have been opened by Karvy DP. ‡ The Syndicate of Karvy.Karvy the Culprit ‡ All the major scamsters along with Karvy have looted the Small Investors. investors. ‡ Karvy has accepted payment and also refunded the amount to the scamsters ‡ It is unearthed that Karvy was issuing single cheque to Panchals. Bharat Overseas Bank.

‡ However the fact that DPs failed to exercise even this basic due diligence gives rise to a suspicion that they have actively colluded with the perpetrators.056 nos) of the multiple dematerialized accounts in relation to IDFC IPO.Action on Karvy ‡ Thousands of dematerialized accounts being opened on the same day with the same branch and being introduced by the same bank should have alerted the DPs at the time of opening of the dematerialized accounts. . It is a matter of serious concern that Karvy-DP has opened such apparently benami / fictitious accounts working out to over 95% (42.

MP Shri Suresh Waghmare. MP Shri Yeshawant Sinha Shri Vedprakash Goyal Shri Vallabhbhai Kathuria. MP ‡ Demanded protection of Small Investors & Criminal Action .Issue Raised by Parliamentarians ‡ Members of Parliament have taken this issue with Finance Minister : ² ² ² ² ² Shri Dharmendra Pradhan. MP Shri Satish T. MP Shri Sanjay Talathi. Gao.

Karvy Registrar. Karvy DP. . addresses are not available or application forms are also not available. Karvy Stock Broker.IGF Demands ‡ IGF demanded full-fledged investigation the role played by Karvy . ‡ IGF has also come to the conclusion that thousands of applications have been made without completing the formalities. all the activities of Karvy be suspended immediately. ‡ IGF demands that till all the investigation is completed. In many cases.

we would request you to ask Karvy to initiate criminal action. ‡ We once again insist that such action must be initiated by SEBI. . 68A of Companies Act against the scamster. bogus names is punishable for 5 years imprisonment. ‡ Anybody applies in an IPO in fictitious.68A is to be administered by SEBI in case of listed companies.Action Demanded by IGF ‡ Action under Sec. NSDL for Karvy. ‡ As IGF has already demanded action by SEBI and NSDL. 55A of Companies Act. ‡ As per Sec. provision of Sec.

P. ‡ Home Minister. Gujarat Govt. RBI. NSDL & CDSL. Finance Ministry. ‡ Economic Offence Wing. Stock Exchanges (BSE/NSE) ‡ Bharat Overseas Bank.C. Karvy. Company Affairs Minister ‡ SEBI. ‡ Palton Road Police Station. Gujarat Police. Mumbai . Gupta.IGF Representations to ‡ Hon.

IGF Action : Police Complaint at Palton Road Police Station .Mumbai .

IGF Action : Police Complaint at Police Headquarters.Gandhinagar. Gujarat .

RBI Findings & Directives ‡ Bank a/c opened without Forms etc ‡ IPO financing given for Fictitious Applicants ‡ Broker-Investor a/c debited & credited for fictitious applicants ‡ Partner in the Scam ‡ Complete audit & Investigation of last 3 years IPO financing .

22 10.41 34. NATIONAL THERMAL POWER CORP.63 2400.00 10900.00 14489.18 15.31 15.01 13.OF TIMES ISSUE SUBSCRIBED (ALL CATEGORIES) 2.28 7.00 312000.26 2004-2005 04050002 04050001 04050003 04050004 04050005 04050006 04050007 04050008 04050009 04050010 04050011 04050012 04050013 04050014 04050015 04050016 04050017 04050018 04050020 04050022 04050023 04050025 04050026 04050027 04050028 04050030 04050032 04050033 04050034 05060001 05060002 05060003 05060004 05060005 05060006 ICICI BANK LTD.06 25.33 28. 3I INFOTECH LTD.00 4/21/2005 9027. NEW DELHI TELEVISION LTD.00 2700.71 13.46 1.12 18.PUBLIC ISSUES : APRIL.00 800.45 16.lacs) RETAIL INVESTORS NO. TATA CONSULTANCY SERVICES LTD.00 5165.42 12. CREW B.36 72.87 24.85 1.78 3.74 29. EMAMI LTD.97 18. SAKSOFT LTD.25 23000.98 4.25 13.05 13.40 3250. INDIABULLS FINANCIAL SERVICES LTD.35 21.97 32.42 7.S.93 3500.62 6.LTD. RAMKRISHNA FORGINGS LTD.33 37.JANUARY.00 21600.86 4.89 26.45 70.00 14928. DATAMATICS TECHNOLOGIES LTD. GOKALDAS EXPORTS LTD.63 2.STEEL LTD. SPANCO TELESYSTEMS & SOLUTIONS LTD. IMPEX FERRO TECH LTD.87 13.00 15120.00 7350. IVRCL INFRASTRUCTURES & PROJECTS LTD.00 1225.38 4/25/2005 145000. UTV SOFTWARE COMMUNICATIONS LTD. VISHAL EXPORTS OVERSEAS LTD.99 36.25 16.60 27.25 3178.54 3.O.35 38.00 750.73 66.95 8.OF TIMES APPLICATIONS SUBSCRIBED NO. COMPANY OPENING ISSUE BOOKBUILDING / DATE AMOUNT FIXED PRICE (Rs.57 9.2006 SNO.00 13281.74 3.15 7.31 3. MSK PROJECTS (INDIA) LTD.08 1.00 4/13/2005 4240. SAH PETROLEUMS LTD.00 542049. BHARATI SHIPYARD LTD.00 8250.81 6.58 9.49 4.46 14.L. ALLAHABAD BANK ALLSEC TECHNOLOGIES LTD.64 39.62 4/19/2005 1430.04 1.2004 . INDOCO REMEDIES LTD.00 .79 1.97 0. PUNJAB NATIONAL BANK GATEWAY DISTRIPARKS LTD.72 6.44 5.50 72.00 11330.A. MANGALAM DRUGS & ORGANICS LTD.81 9099.40 2. INDIA INFOLINE LTD. ORIENTAL BANK OF COMMERCE 4/2/2004 4/2/2004 4/12/2004 4/21/2004 4/29/2004 7/29/2004 8/19/2004 8/30/2004 9/6/2004 9/27/2004 10/7/2004 11/1/2004 11/1/2004 11/25/2004 11/29/2004 12/2/2004 12/17/2004 12/22/2004 1/24/2005 2/18/2005 2/21/2005 3/4/2005 3/7/2005 3/9/2005 3/18/2005 3/22/2005 3/30/2005 3/30/2005 3/30/2005 324580.21 2005-2006 4/5/2005 4319. DECCAN CHRONICLE HOLDINGS LTD.94 57600.00 536814.56 58.84 5.97 3.PRODUCTS LTD.50 62.14 80. DWARIKESH SUGAR INDUSTRIES LTD. DENA BANK JET AIRWAYS (INDIA) LTD. JAIPRAKASH HYDRO-POWER LTD.11 1.60 753.67 6.50 4/6/2005 82000.00 189934.72 46. S.83 1. SHRINGAR CINEMAS LTD.96 2.55 60.08 1225.78 5.00 BOOKBUILDING FIXED PRICE BOOKBUILDING BOOKBUILDING FIXED PRICE BOOKBUILDING FIXED PRICE FIXED PRICE BOOKBUILDING FIXED PRICE BOOKBUILDING FIXED PRICE BOOKBUILDING BOOKBUILDING FIXED PRICE BOOKBUILDING BOOKBUILDING FIXED PRICE FIXED PRICE BOOKBUILDING BOOKBUILDING BOOKBUILDING BOOKBUILDING BOOKBUILDING BOOKBUILDING BOOKBUILDING FIXED PRICE BOOKBUILDING BOOKBUILDING BOOKBUILDING BOOKBUILDING BOOKBUILDING FIXED PRICE BOOKBUILDING BOOKBUILDING 141042 14206 153281 417794 64517 1162359 4640 18469 129074 6956 1394627 35568 158678 175499 81262 400612 366137 62324 504533 433351 269802 177018 776237 122203 70506 431497 38334 147570 167535 23046 143756 8473 25132 30665 28479 0.75 5880.

00 FIXED PRICE 9027.00 FIXED PRICE 9288.58 2.84 5.00 FIXED PRICE 149634.38 BOOKBUILDING 145000. SPL INDUSTRIES LTD. INDIA INFOLINE LTD.70 31.LTD. K.97 3.00 BOOKBUILDING 3328.00 BOOKBUILDING 3000.81 75.00 BOOKBUILDING 1881.79 1. YES BANK LTD.30 6.83 1.00 B KB 4240.40 62. ORIENTAL BANK OF COMMERCE S OPPER`S STOP LTD. HT MEDIA LTD.97 0.00 BOOKBUILDING 4750. INFRASTRUCTURE DEVELOPMENT FINANCE CO.40 4.62 53.35 10.92 56.88 9.60 FIXED PRICE 1200.31 6.LTD.13 7.95 175.00 BOOKBUILDING 1750.42 66.00 FIXED PRICE 6300. FCS SOFTWARE SOLUTIONS LTD.00 FIXED PRICE 999. SUZLON ENERGY LTD.00 BOOKBUILDING 40762.00 BOOKBUILDING 1750.00 FIXED PRICE 4200.16 12.50 FIXED PRICE 1200.00 BOOKBUILDING 1600. YAS PAPERS LTD.33 14.83 5. UNIPLY INDUSTRIES LTD. SYNDICATE BANK S RI RAMRUPAI BALAJI STEELS LTD.66 33. TALBROS AUTOMOTIVE COMPONENTS LTD.74 35.00 FIXED PRICE 9450. SHREE RENUKA SUGARS LTD.55 29.55 8.27 4.63 45. VIKASH METAL & POWER LTD.95 8.34 28. MSP STEEL & POWER LTD.81 6.22 BOOKBUILDING 1693. AMAR REMEDIES LTD. PROVOGUE (INDIA) LTD.00 BOOKBUILDING 4400.00 BOOKBUILDING 20000.36 2.00 FIXED PRICE 29999. CYBER MEDIA (INDIA) LTD. BANNARI AMMAN SPINNING MILLS LTD.59 13. BEEYU OVERSEAS LTD.75 22.00 BOOKBUILDING 1107.82 7.19 9.30 BOOKBUILDING 13000. SASKEN COMMUNICATION TECHNOLOGIES LTD.00 FIXED PRICE £¢© ¢ ¤£¢© §¢ ¤£¢© §¢ ¤ §     ¢£ £ § ¤ ¥ © ¢ £ ¨§ ¤§ £   ¥ ¨ ¥ §§ © © ¦ £¢ ¡   ¢¡ § £ § ¨§ ¥ ¤             23046 143756 8473 25132 30665 28479 75532 8072 40060 48218 27075 40644 83806 247417 246919 66408 93186 18946 73179 30113 151626 111472 49479 61403 613680 143846 397151 172841 197463 205898 128160 49715 509603 65110 159631 52508 44337 73670 80159 58038 32044 5.30 37.01 3.87 19. 5/2005 4/6/2005 4/13/2005 4/19/2005 4/21/2005 4/25/2005 4/28/2005 5/4/2005 5/12/2005 5/18/2005 5/26/2005 6/9/2005 6/9/2005 6/10/2005 6/15/2005 6/20/2005 6/22/2005 6/24/2005 6/29/2005 6/30/2005 7/4/2005 7/7/2005 7/8/2005 7/9/2005 7/15/2005 8/4/2005 8/11/2005 8/22/2005 8/25/2005 9/1/2005 9/14/2005 9/20/2005 9/23/2005 9/27/2005 9/30/2005 10/7/2005 10/13/2005 10/14/2005 10/19/2005 10/24/2005 10/24/2005 4319. ERA CONSTRUCTIONS (INDIA) LTD. NANDAN EXIM LTD.15 6.00 FIXED PRICE 11000.92 12.50 B KB 82000.23 30.26 17.97 BOOKBUILDING 6074.86 4.00 FIXED PRICE 2500. JINDAL POLY FILMS LTD. S REE GANES FORGINGS LTD.63 .00 19. SOUTHERN ONLINE BIO TECHNOLOGIES LTD.00 FIXED PRICE 137224.00 FIXED PRICE 1500.23 15.07 20.05 14.23 12.00 BOOKBUILDING 4104.SUGAR MILLS LTD.47 9.40 12. PARADYNE INFOTECH LTD.37 18.2005-2006 05060001 05060002 05060003 05060004 05060005 05060006 05060007 05060008 05060009 05060010 05060011 05060012 05060013 05060014 05060015 05060016 05060017 05060018 05060019 05060020 05060021 05060022 05060023 05060024 05060025 05060026 05060027 05060028 05060029 05060030 05060031 05060032 05060033 05060034 05060035 05060036 05060037 05060038 05060039 05060040 05060041 S A E AS A A ABA BA K ES . VIVIMED LABS LTD.74 3.41 15.65 38. ALPS INDUSTRIES LTD. A SE E MA A AM DRUGS & ORGA S LTD.65 44.62 B KB 1430.32 28. NECTAR LIFESCIENCES LTD.05 25.88 35. AURIONPRO SOLUTIONS LTD.27 FIXED PRICE 3180.96 19.20 28.19 1.21 7. IL&FS INVESTSMART LTD.04 44.M.60 FIXED PRICE 14250.26 81.20 4.00 BOOKBUILDING 13698.63 99.01 5.74 42.19 2.33 6.10 BOOKBUILDING 31500.00 BOOKBUILDING 1386.63 2.27 3.48 18.95 1.98 4.84 44. GUJARAT INDUSTRIES POWER CO.04 2.16 16.69 29.42 9. PBA INFRASTRUCTURE LTD.00 BOOKBUILDING 25000.00 BOOKBUILDING 2700.

92 33.98 3. INOX LEISURE LTD.85 FIXED PRICE 1/23/2006 21384. CELEBRITY FASHIONS LTD.00 FIXED PRICE 12/13/2005 3000.85 7.94 25.18 5.02 12.00 BOOKBUILDING 11/18/2005 24000.74 35. PARADYNE INFOTECH LTD.68 13. PVR LTD.66 3.82 6.00 BOOKBUILDING 12/1/2005 575000.23 15.00 FIXED PRICE 10/7/2005 11000. K.00 BOOKBUILDING 12/12/2005 2000. GINNI FILAMENTS LTD.87 19. COMPULINK SYSTEMS LTD. KERNEX MICROSYSTEMS (INDIA) LTD.45 14.05 10. ICICI BANK LTD.09 32.14 8.LTD.56 NA NA NA NA NA NA NA 12.55 8.84 44.60 3.35 8.00 BOOKBUILDING 1/30/2006 3465.M.00 FIXED PRICE 10/24/2005 2500.19 27.00 BOOKBUILDING 1/24/2006 37260.00 BOOKBUILDING 10/14/2005 3328. PUNJ LLOYD LTD.00 BOOKBUILDING 12/19/2005 8190. PRITHVI INFORMATION SOLUTIONS LTD. DYNEMIC PRODUCTS LTD.00 FIXED PRICE 12/13/2005 64210.00 BOOKBUILDING 1/25/2006 36943.19 1. 9/27/2005 2700.00 BOOKBUILDING 9/30/2005 1386.67 10. ANDHRA BANK BANK OF BARODA SREE SAKTHI PAPER MILLS LTD.56 BOOKBUILDING 12/19/2005 5000.08 FIXED PRICE 11/28/2005 9901.05060034 05060035 05060036 05060037 05060038 05060039 05060040 05060041 05060042 05060043 05060044 05060045 05060047 05060046 05060048 05060049 05060051 05060050 05060052 05060053 05060054 05060055 05060056 05060057 05060058 05060059 05060060 05060061 05060062 05060064 05060063 05060066 05060065 05060067 05060068 05060069 05060070 05060071 05060072 05060073 AURIONPRO SOLUTIONS LTD.42 9.00 BOOKBUILDING 10/13/2005 20000.04 1. RAJ RAYON LTD. ENTERTAINMENT NETWORK (INDIA) LTD.50 9.75 3. BANNARI AMMAN SPINNING MILLS LTD. EVEREST KANTO CYLINDER LTD. RADHA MADHAV CORP.05 54. JAGRAN PRAKASHAN LTD.27 0.37 42.01 3.00 FIXED PRICE 10/19/2005 9450.82 16.00 BOOKBUILDING 12/9/2005 10800. BARTRONICS INDIA LTD.33 14.80 9.95 25.00 BOOKBUILDING 11/25/2005 2723. EDUCOMP SOLUTIONS LTD.00 BOOKBUILDING 11/18/2005 15725.09 19. REPRO INDIA LTD.22 17.27 11.00 FIXED PRICE 10/25/2005 13500. TRIVENI ENGINEERING & INDUSTRIES LTD.00 BOOKBUILDING 1/6/2006 4000. TULIP IT SERVICES LTD.28 9.50 BOOKBUILDING 11/17/2005 14805.00 BOOKBUILDING 1/16/2006 76500. NITIN SPINNERS LTD. GUJARAT STATE PETRONET LTD.63 15.85 NA NA NA NA NA NA NA NA : NOT AVAILABLE .00 BOOKBUILDING 1/12/2006 11253.04 27.LTD.33 6.15 6.95 14.01 3. AIA ENGINEERING LTD.00 BOOKBUILDING 11/22/2005 9000.00 BOOKBUILDING 10/24/2005 3000.22 28.34 42.00 FIXED PRICE 1/18/2006 1543.86 10.35 28.66 19.00 BOOKBUILDING 12/19/2005 4800. BOMBAY RAYON FASHIONS LTD.00 BOOKBUILDING 11/11/2005 9432.00 BOOKBUILDING 12/8/2005 16650.11 BOOKBUILDING 11/28/2005 4323.00 BOOKBUILDING 12/20/2005 4500.00 BOOKBUILDING 11/10/2005 6000.00 BOOKBUILDING 1/12/2006 5525.22 1. RAMSARUP INDUSTRIES LTD. ABG SHIPYARD LTD.00 BOOKBUILDING 1/16/2006 163300.SUGAR MILLS LTD.59 BOOKBUILDING 1/27/2006 19800.23 39. PIRAMYD RETAIL LTD. GUJARAT INDUSTRIES POWER CO.04 44.47 15. PBA INFRASTRUCTURE LTD.00 FIXED PRICE 65110 159631 52508 44337 73670 80159 58038 32044 146450 93329 152367 133481 56270 258694 74517 19306 113794 29785 256377 65129 205214 38580 41710 340800 93636 41669 82702 151908 149779 253519 49291 228335 224064 NA NA NA NA NA NA NA 25. VIKASH METAL & POWER LTD. SUNIL HITECH ENGINEERS LTD.01 22.14 11.45 20.20 4.01 5.67 9. ROYAL ORCHID HOTELS LTD.22 20.51 2.27 15.91 38. SHREE RENUKA SUGARS LTD.00 BOOKBUILDING 1/17/2006 2500.

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Bharat Overseas Bank Ltd. . The detailed scrutiny by the Reserve Bank revealed that the funding of IPOs through multiple accounts was being followed by Bharat Overseas Bank and this covered funding of several other IPOs. a limit of Rs. besides crediting the proceeds of the refund orders to accounts other than the accounts of the payees. Misuse of IPO finance. It also did not act upon the alerts emanated from the internal audit. 2006 Bharat Overseas Bank. The RBI had issued show cause notices to all these banks. inter-alia. for breach of prudent banking practices and facilitating misuse of IPO finance to ineligible borrowers. On careful examination of banks' submission. (which specified. the RBI has come to a conclusive decision that the aforesaid violations were substantiated and accordingly the monetary penalties are imposed. (ii) Apart from providing intra day funding of margin money to brokers. In response thereto banks had submitted their written responses and the CEOs had also sought personal hearing with the RBI. which was granted. the bank had committed the following irregularities (i) Extending IPO finance to fictitious/benami individuals without appropriate due diligence to establish their identity or existence. the bank had extended huge amounts to a group of accounts through these fictitious/benami individuals in violation of RBI directive on limits on funding of IPOs.Reserve Bank of India action on Banks January 13. Vijaya Bank and certain other banks. Infrastructure Development Finance Company (IDFC) being one of them. 1949 imposed monetary penalties on seven scheduled commercial banks for violation of RBI regulations on Know Your Customer (KYC) norms..Penal action taken The Reserve Bank of India in exercise of powers vested in it under the provisions of Section 47 A (1)(b) of the Banking Regulation Act. (iv) Collection of account payee cheques of various individuals who are not the customers of the bank. (iii) The internal control system has failed to arrest the above irregularities.10 lakh per individual).

guidelines/directives/instructions 1.00 lakh (Rupees five lakh only) on the bank. In view of the above.relating to monitoring of suspicious transactions. . the Reserve Bank of India has imposed a penalty of Rs. In view of the above.20. inter-alia.5.5. ICICI Bank Ltd.relating to opening of deposit accounts 2. Citi Bank After examining the bank's reply and your oral submission on January 21.00 lakh (Rupees twenty lakh only) on the bank. that the bank had violated RBI guidelines/directives/instructions 1. the Reserve Bank of India has imposed a penalty of Rs.00 lakh HDFC Bank Ltd.00 lakh (Rupees five lakh only) on the bank. The Reserve Bank of India held. the bank had violated RBI guidelines/directives/instructions relating to opening of accounts monitoring of transactions for adherence to KYC norms. In view of the above. In view of the above. failure of monitoring of transactions for adherence to KYC norms and failure of internal controls.3. adherence to KYC norms 2. 2006. the Reserve Bank of India has imposed a penalty of Rs. there was failure of internal control and acceptance of account payee cheques across the counter without proper authorization. Issue of large number of cheque leaves not in consonance with the status of the account holder.5. the Reserve Bank of India has imposed a penalty of Rs.

00 lakh (Rupees ten lakh only) on the bank.5.00 lakh (Rupees five lakh only) on the bank.15. Standard Chartered Bank. a) Opening multiple accounts without adherence to KYC norms b) Failing to monitor large value transactions c) Failure of internal control to check the irregularities in KYC compliance and monitoring of transactions in the deposit accounts.Indian Overseas Bank.In view of the above. the bank had violated following RBI guidelines /directives/instructions. In view of the above. Vijaya Bank.00 lakh (Rupees fifteen lakh only) on the bank. a) Opening multiple accounts without adhering to KYC norms. c) Failing to monitor the unusual and suspicious transactions in the account the failure of internal controls in monitoring the non-compliance with KYC policies/ procedures In view of the above. the Reserve Bank of India has imposed a penalty of Rs. . failed to verify the end use of funds in respect of loans granted against shares to a number of individuals. b) Facilitating manipulation of IPO process by certain group of individuals by extending IPO finance to various fictitious individuals. a) . the bank had violated the RBI guidelines/directives/instructions relating to KYC norms. the bank had violated RBI guidelines / directives/instructions in regard to the following aspects. the Reserve Bank of India has imposed a penalty of Rs. the Reserve Bank of India has imposed a penalty of Rs.10.

Income Tax Dept. Fin Ministry. CDSL. Brokers & others . NSDL.investors ‡ SEBI. RBI. Exchanges ‡ Media Reports ‡ Market Experts & Source ‡ Banks.IGF Sources ‡ Small Applicants.

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