Cheated in IPO scam ? You may get a refund
REFUND RS 92 CR TO INVESTORS DUPED IN 2005-06 ! if you were cheated during the IPO scam of 2 years back, then you may be in for help and relief.
Thousands of retail investors in the primary market could be in line to be compensated monetarily for losses due to manipulation in the initial public offering (IPO) allotment process of 21 companies two years ago. A Sebi-mandated committee has recommended that individual investors who were short-changed in IPOs between 2003 and 2005 be compensated in monetary terms.
The Justice Wadhwa committee has worked out a compensation of Rs 92 crore for investors who had applied for shares in the retail category in 21 IPOs in 2005-06. This is based on the closing price on the listing day for all these IPOs, which include IDFC, Jet Airways and Suzlon. In essence, investors who lost out in these IPOs should be paid the difference between the offer price and the closing price on the listing day, the committee has said in its report, according to sources. This is reckoned to be the unjust gain made by scamsters who cornered shares meant for individual investors.
Sources said the report has recommended that the first to be compensated should be retail investors who failed to get any allotment, followed by those who were allotted fewer shares than they had applied for. Orders to disgorge ill-gotten gains are common in the US, the world’s largest financial market. Finance Minister P Chidambaram had said last year that he wanted to send out a strong signal to those attempting to defraud investors by compensating them for the losses they had incurred. He had told Sebi to work out a mechanism to ensure this.
Sebi board to scan old records
The Sebi board will now have to consider the Wadhwa committee’s recommendations and then take suitable action. This would mean going back to old records with market intermediaries and identifying thousands of investors, which can be a cumbersome exercise. In almost all 21 IPOs, the shares were listed at a premium to the offer price. The compensation can be paid out by selling securities worth over Rs 140 crore of those operators involved in the IPO scam which have been frozen in their depository accounts based on an order issued by Sebi.
The 2005-06 scam featured a clutch of operators who put in thousands of fictitious applications in several IPOs in the retail category of a small value. After allotment, these operators transferred the shares to another set of players, who in turn transferred them to financiers who had provided the funds for investing in the IPOs. These shares were then sold on the first day of listing, landing them a windfall — the price difference between the IPO price and the listing price. Thousands of bank accounts and demat accounts were opened in the names of fictitious entities, which Sebi investigators unearthed in 2006 after checking over 100 IPOs.
During the probe, it came to light that key operators had cornered shares representing 0.52 % of the total number of shares allotted to the retail investors in the Jet Airways IPO. In the Suzlon offering, 3.74 % of shares were allotted to operators using over 21,000 different accounts while in the NTPC issue, the operators used 12,853 accounts to corner 1.30 % of the total number of shares allotted to investors.
Of the 21 IPOs, the IDFC IPO’s offer price was Rs 34, against which it got listed at Rs 49.9 — a premium of over 46 %. The shares closed on the opening day, at Rs 69.5%. In the case of Yes Bank — the offer price was Rs 45. On listing, it rose to Rs 65, a 44% premium, and closed at Rs 61. Maruti Udyog offered its shares to investors at Rs 125. On listing, it climbed to Rs 158.4, a premium of 27% and closed the day at Rs 164.05. Amar Remedies had an offer price of Rs 28, listed at Rs 50 — a premium of 78%, while for NTPC, the offer price was Rs 62 and the listing price Rs 70 — a premium of 12.9%. It closed at Rs 75.5. TCS had an offer price of Rs 850. It listed at Rs 1,076 — a premium of 27%, and ended the day at Rs 987. Suzlon offered its shares at Rs 570, listed at Rs 640 — a premium of 25 % — and closed at Rs 690. Jet airways offered shares at Rs 1,100, listed at Rs 1,211 — a 10% premium — and closed at Rs 1,305.
Such a measure would be very welcome for investors; most retail investors feel that the market is always manipulated, and that SEBI turns a blind eye to such things. So if SEBI can take a step in this regard, it would be extremely welcome.
December 22nd, 2007 at 3:19 pm
The Media, Journalism and Caveat Emptor – Consumer Rights
nocopyright -2007
(who wants to make a living writing?)
Tax Paying Citizen
The Media and Journalism have place in society because of services they give to society. It may come into the mind immediately that this service is some kind selfless, altruistic, charitable or social service. It is definitely not.
Ok, is it the kind of service that Parliments, Government or Judiciary gives to citizens? Most definitely not! Citizens collectively have not created the organizations delivering the service nor do they have any votings rights, in its classical sense or say in how this presumptious “estate” as they call themselves, ought to run.
What indeed is the service they provide? And mind you, this is not free service but a paid through nose hard cash for the services from the citizens. And this payment from citizens is not donations.
1) Report report facts of interest to individuals across society 2) As seperate topic to explain why they presented the stuff to subscribers 3) And still another topic to explain the ideas, concepts, the owners, editors and journalists themselves as individuals subscribe to.
All this in other words is simple fact that they are “sellers” of news and opinion. News and opinions are thus “products” that are put up for sale in the market place. The “buyers” are readers, subscribers, viewers. This is simple ordinary “business”. And no need for the consumer to have any hazy or fanciful notions of the great services that newspapers or TV provide.
What type of “business” is it? It is ordinary every day business. And as with all human civil society businesses, excepting the barber’s business, the consumer needs to be fully aware of what he is being dished out with. It is his right to demand and obtain value for money – else find another “seller” And if all “sellers” have ganged up or syndicated to invoke MRTP Act or simply have their cable whatever connections cut, save energy, “improve their health and that of the planet”. (Dr.Pachauri made this remark in connection with meat eating in an interview including Dr.Al Gore at CNN).
You might ask why I have dragged in barbers? This is because, as businesses go it is the only business that is totally honest and totally transparent in intent, understanding and satisfaction after the job is done by both seller and buyer of service. The “seller’s” transparent and crystal clear intention is to crop and or shave the customer. And customer is most certain of the purpose of the whole business, to be cropped and or shaved. Rest of human businesses are to be dealt with caution on the part of the “buyer”. And not to get diverted or carried away by trappings.
caveat emptor – is as ancient as life on this planet. Ever since sentience arose from muck, caveat emptor wisdom is in built in all animal societies.
In words with no trappings, except Government Departments’ free broadcasts nobody, alas renders obligatory social service of the news and views kind. Nor is there need many times for them. When Government Departments become corporations with autonomy and stuff they end up being highly mixed up, dichotomous, zombie organizations. And exhibit pathological symptoms of being neither here nor there.
It is great fallacy and tragedy that once in a while, the media think they are educators! And society’s watchdogs and they try to dish this out to readers. caveat emptor ! The “buyer” ought to think cooly. If they wanted to be educated should they not be educated by those that are qualified educators?
And what is supposed to be the end result of this so called education? Is it to be greater prevalence of “good sense”. Can anybody be educated for good sense, in the first place?
In his A discourse on method Rene Descartes, 1596-1650 writes
“Good sense is, of all things among men, the most equally distributed; for every one thinks himself so abundantly provided with it, that those even who are the most difficult to satisfy in everything else, do not usually desire a larger measure of this quality than they already possess.
And in this it is not likely that all are mistaken the conviction is rather to be held as testifying that the power of judging aright and of distinguishing truth from error, which is properly what is called good sense or reason, is by nature equal in all men; and that the diversity of our opinions, consequently, does not arise from some being endowed with a larger share of reason than others, but solely from this, that we conduct our thoughts along different ways, and do not fix our attention the same objects. For to be possessed of a vigorous mind is not enough; the prime requisite is rightly to apply it. The greatest minds, as they are capable of the highest excellences, are open likewise to the greatest aberrations; and those who travel very slowly may yet make far greater progress, provided they keep always to the straight road, than those who, while they run, forsake it.”
caveat emptor. It is the buyer’s responsibility to be aware and travel very slowly. And they may yet make far greater progress, provided they keep always to the straight road, than those “sellers of good sense”. Aren’t they the ones that are forever on the run? and while they run, forsake a topic for “commercial breaks”?
Since news and views are “products” that may or may not satisfy what you want or do not want. It is your preoragative to choose where to get the stuff and who you go with to get it. This is no way different to your choice to visit the supermarket or the flea market. But nowhere in the market place is anything for free.
It is your right to question the news views, “Who gave you the first information?”, “How did you land up in the God forasken place”, “When did you land there, give correct times”, “How many of you were there?”, “At what time did you go to the field?”, “Who took you there?”, “Did you see the criminal act and then shot the movie”, “From what distance did you take the shot?”, “What is the make of your camera”, “How did you get close up scenes in the open field?”, “How come the kids did’t see you”? Caveat Emptor, you the buyer need to know all aspects of the story you are being dished out with.
It amazes me that no citizen’s point of view is prime focus in any of newspapers or TV channels. Looking for a news channel that would give honest unbiassed news is yet a pipe dream. And a great opportunity for starting a citizen’s channel and newspaper and very strict exclusion of professional journalists. Why? A most frightening example of giving “sellers” the control of society is panel discussions. Here, respected persons elected by you, the “customers” of news – views, for assembly or parliment are seen bowing to commercial breaks and paid to act journalists.
Of course the consumer may have a number of justifications and shift the blame games to play. Politicians are all like, I didn’t vote for the guy, whatever. The ultimate truth is the “consumer”, the has put himself on the couch and not exercised his rights. If there is hurt and pain experienced by consumers, caveat emptor says, “How very sad, you have put yourself in the place to be hurt… think, think and think again the next time. There are laws to protect you”. And if there are no laws they can be, sorry use the word, “enacted
November 18th, 2008 at 7:19 pm
cheated in ipo scam refund process