SEBI disposes case against Motilal Oswal in IPO scam

Market regulator SEBI has disposed a case against brokerage firm Motilal Oswal in connection with an IPO scam after the company agreed to pay Rs 500000 as settlement charges."The consent order disposes the pending enquiry proceedings against the applicant (Motilal Oswal) in the matter of IPO irregularities during 2003-05," Securities and Exchange Board of India (SEBI) said in its order.The case pertains to alleged cornering of shares meant for retail investors by scamsters in initial public offerings between 2003 and 2005 for which Motilal Oswal was the broker.The enquiry revealed that the brokerage firm had failed to exercise due diligence and did not adhere to the 'Know Your Clients' (KYC) norms while opening 697 demat accounts with common addresses."The High Powered Advisory Committee (HPAC), constituted by SEBI, recommended the case for settlement on payment of Rs five00000 towards settlement charges," SEBI said in its order.During the process of enquiry, Motilal Oswal had approached SEBI for a settlement of the said proceedings through a consent order.For obtaining consent orders, an entity approaches SEBI, admits to wrongdoings and pays fine to get rid of charges being probed.The IPO scam of 2003-05 refers to cornering of shares reserved for retail investors in the public issues of 12 public offers, including ILand FS, TCS, Yes Bank, Shoppers' Stop, through fictitious multiple demat accounts.