DCA trains guns on 68 big operators to probe meltdown
New Delhi—DCA’s has initiated a probe on 68 companies on Sebi’s recommendations. These include 16 Ketan Parekh companies, six Nirmal Bang companies, three of Shankar Sharma, three of Shailesh Shah, nine of the R K Damani stable, and 7 of Ajay Keyan. Among others are three companies of the Consortium Group, BLB and Anand Rathi’s Rathi Global Finance.
The non-finance companies being probed include three belonging to the Zee Tele Group, HFCL, Nirma, Ranbaxy, Lupin Laboratories, Adani Exports, Padmini Polymers and Shonkh Technologies.
Apart from the Sebi-recommended probe, separate investigations have also been launched, on the basis of individual complaints, against nine other companies. These include two Videocon Group companies, Sterlite Industries, Mukta Arts of Subhash Ghai, BPL and Balaji Telefilms.

The Sebi was asked to investigate the role of major market players and some companies suspected of insider trading after the post-Budget market meltdown.
Its preliminary report suggested the involvement of many of these entities in the crash of 2001. The government suspects that the crash was not warranted because of the investor-friendly features of the budget, and that it was brought about by vested interests.
Back to News Review index page  

Govt to sell 30 per cent of Nalco through ADR issue
New Delhi--The government is considering the sale of its 30 per cent equity in National Aluminium Company Ltd (Nalco) through an American Depositary Receipts (ADR) issue. The ADR route has been chosen because it might fetch a better price for the government equity in Nalco and is expected to outperform offloading through Global Depository Receipts (GDRs). The erstwhile Disinvestment Commission had recommended up to 15 per cent equity sale through GDRs.
Secondly, investors were willing to put their money in old economy stocks, thanks to the new economy meltdown. Further, investors have not received as much returns in China as they had expected. So, they are likely to go for a good Indian company.
Finally, Nalco has adopted Generally Accepted Accounting Practices (GAAP), which is likely to stand in good stead with the prospective investors.
The department of disinvestments is also favourably disposed towards the route recommended by merchant bankers Merril Lynch.
Apart from the arguments provided by Merrill Lynch, the DoD has its own reasons for showing a predilection for the ADR route. Divestment in Bharat Aluminium Corporation (Balco) seems to have left a bad taste in their mouth.
Back to News Review index page  

‘Broking community might consolidate under new system’
Mumbai-- Addressing the Annual Securities Industry summit by Invest India Economic Foundation (IIEF), MoF joint secretary Jaimini Bhagwati said that with new trading systems in place and corporatisation of stock exchanges, consolidation among stockbrokers might happen.
He said that there are around 9,700 brokers registered with the Securities and Exchange Board of India (Sebi) and out of these, a number of them have not been operating. Also, most of them are from the smaller/regional stock exchanges, some of which do not have a business of more than Rs 1 crore. In addition, the corporatisation of the bourses will also eliminate a number of members.
The capital adequacy requirement (CAR) for a broker in these exchanges is likely to be increased, thereby eliminating some of the brokers from the system.
"Consolidation of the industry may be a good idea and capital market players should approach regulatory bodies with suggestion for a seamless transition," Mr Bhagwati said.
Back to News Review index page