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Is Sebi taking a fresh look at Wipro?

NetScribes/Salil Panchal & Janaki Krishnan

The buzz about the alleged insider trading in Wipro has become a talking point within the Securities and Exchange Board of India (Sebi). Sources within Sebi say that this issue has been discussed in recent weeks; a decision on the issue is, however, is yet to be arrived at.

Sebi officials, however, still refuse to comment on this issue. In 1997, Sebi had sought information relating to some transactions which were allegedly carried out by Wipro, in the Wipro stock, wherein purchases were made just prior to the announcement of a bonus issue in July that year. This data had been sought by the regulator from the stock exchanges - Bombay Stock Exchange and National Stock Exchange - through brokers who carried out the transactions and maintained clients records for the same.

The prospectus for the recently listed American Depositary Share (ADS) issue filed by Wipro before the Securities and Exchange Commission (SEC) does not mention any details relating to any possible investigation, probe or inquiry which had been carried out in earlier years by Sebi.

According to merchant bankers, had such an inquiry been official, it would have to be disclosed by the company to the SEC, prior to an ADS listing. However, since the Wipro ADS prospectus is silent on this issue, one is led to believe that there never was an official investigation or inquiry into the insider trading issue.

Though the matter remains under a cloud, doubts are now being raised on whether Sebi ever conducted an official probe/inquiry into the issue or kept it at an unofficial level, with the possibility of seeking more data at a future date. Sebi officials have consistently remained tightlipped on this matter.

The Wipro ADS prospectus, in its contingencies column, as part of 'Notes to consolidated financial statements', states: "The company is involved in lawsuits, claims, investigations and proceedings, including patents and commercial matters, which arise in the ordinary course of business. There are no such matters pending that Wipro expects to be material in relation to its business".

Details relating to Wipro's transactions with ICICI Ltd in 1996, have been disclosed. The company has also said that they do not have any material legal proceedings pending against them.

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