IPO scam: Sebi lifts ban on 3 DPs

The Securities and Exchange Board of India (Sebi) on Friday lifted the ban on opening of fresh demat accounts by ILand FS, ING Vysya Bank and IDBI Bank in their capacity as depository participants.These three entities, along with a host of others, were barred from opening fresh demat accounts by Sebi in April for their alleged involvement in the initial public offering (IPO) scam.Sebi passed Friday’s order after taking into account the submissions made by the three institutions. The Sebi order also states that the probe against the three entities has not been closed.“It is clarified that the present order gives only a prima facie finding as to the necessity of passing the above directions at this stage and accordingly, all issues and contentions are left open to be decided by the enquiry officer and to be decided in subsequent proceedings to his report,” the Sebi order in each case said.The charge against the three entities was that they had failed in adhering to the know-your-client norms laid down by Sebi, thereby facilitating opening of demat accounts in fictitious names with an aim to corner the retail portion of shares in IPOs.In its order in April, Sebi had banned 12 depository participants including HDFC Bank, Centurion Bank of Punjab, and Motilal Oswal Securities from opening new demat accounts until further directions from the regulator. In addition, Sebi had also barred 24 firms and individuals from any kind of dealings in the securities market, including IPOs, and also banned 85 financiers from securities market dealings.However, the following day, Sebi stated that it had kept its order in abeyance banning Indiabulls from any stock market operations. Then on May 26, Sebi allowed Karvy Stock Broking to continue with its existing depository participant business, but asked it not to open fresh demat accounts.It also restricted the proprietary operations of Karvy Stock Broking. The same day, Sebi also withdrew its interim orders against Magnum Equity Services and Jhaveri Securities.Then on June 16, Sebi withdrew its interim order against Anagram Securities, but said “order does not foreclose any further action against ASL (Anagram Securities) or any other person/entity, as deemed fit.”