IPO scam: Retail investors may be compensated

Mumbai, Dec 29 (PTI) Initial Public Offerings (IPOs) of
companies like TCS, National Thermal Power Corporation (NTPC)
and Jet Airways were rigged and scamsters gained close to Rs
100 crore between 2003-05, market regulator Securities and
Exchange Board of India (Sebi)- appointed panel has said.

The panel headed by retired Supreme Court of India judge
Justice D P Wadhwa also recommended that the money be
recovered from the culprits and distributed among retail
investors. If implemented, it would create history in terms of
compensating investors who lost out on share allotment.
According to the Wadhwa Committee report, scamsters gained
Rs 95.69 crore and suggested that the money could be recovered
from their frozen demat accounts, which hold Rs 147.85 crore
worth of shares and Rs 1.2 crore in the bank accounts frozen
by Central Bureau of Investigation (CBI).
The committee was set up by regulator Sebi to probe
irregularities in IPOs floated during 2003-2005 including
those of Tata Consultancy Services, Jet Airways, Suzlon
Energy, NTPC, Yes Bank and Shoppers Stop.
The preference will be given to those retail applicants
who did not get any share because of cornering of shares by
scamsters who created fictitious demat accounts. Investors who
got a few shares will also be eligible for compensation, the
report suggested.
If recommendations are accepted, Prithvi Haldea of Prime
Database said, "This will be a landmark judgement because this
is for the first time in the history of Indian capital market,
the losing investor will be compensated for their losses."
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