IPO scam: Sebi unearths more bogus demat accounts

Soon after the Yes Bank IPO scam, Securities and Exchange Board of India (Sebi) has unearthed 45,000 more fictitious demat accounts floated by 39 entities to corner shares meant for small investors in the initial public offer (IPO) of IDFC. Sebi has started a probe against Karvy Computer Shares, Kotak Mahindra Capital Company DSP Merrill Lynch and SBI Capital Markets for ‘‘conniving and derailing’’ the allotment of shares in an IPO. Apart from banning 35 entities who opened benami accounts from buying and selling IDFC shares from applying in future IPOs, it has also prohibited four entities—including Roopalben Panchal of Yes Bank IPO fame—from the capital market. ‘‘The entire problem is not with the allotment process, which has by and large come to stay as stable and secure, but the way in which banks and depository participants (DPs) in some cases, which have connived with the key operators in derailing the tried and tested process of fair and transparent allotment of shares in IPO,’’ Sebi said. Some of the banks in which the suspected benami accounts were opened are Bharat Overseas Bank, HDFC Bank, ING Vysya Bank, Vijaya Bank and IDBI Bank. Karvy Computer Shares — which is facing a probe in the Yes Bank IPO bogus share allotment also — opened 95% (42,056) multiple demat accounts in IDFC IPO. Of the total 45,000 fake accounts, Sebi suspects that 14,807 are Roopalben Panchal’s, the main accused in Yes Bank IPO scam. Other names to figure are Sugandh Estates, Purshottam Budhwani and Manojdev Seksaria. Sebi said depositories NSDL and CDSL are directed to ensure that the dematerialised accounts which served as conduit for Roopalben Panchal, Sugandh, Purshottam Budhwani and Manojdev Seksaria are not utilised for manipulation of IPO allotment in future. The Sebi said000 of dematerialized accounts were opened on the same day with the same branch. This should have alerted the DPs at the time of opening of the dematerialized accounts. ‘‘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. It is a matter of serious concern that Karvy-DP has opened such apparently benami/fictitious accounts working out to over 95% (42,056 nos) of the multiple dematerialized accounts in relation to IDFC IPO,” Sebi whole time director, G. Ananthakrishnan said.