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Cong wants JPC probe into market crash

Tara Shankar Sahay in New Delhi

The Congress on Saturday demanded a Joint Parliamentary Committee probe into the recent stock market crash scam involving "big bull " Ketan Parekh, underlining that nothing less would do because there were too many dimensions which needed to be unfurled.

"The present scam is a classic clone of the 1992 stock market crash scam involving Harshad Mehta both in style and scale," pointed out chief party spokesman S Jaipal Reddy.

"The Securities Exchange Board of India has failed to act as a watchdog, it has not even been a scarecrow," Reddy told reporters while giving them an 'insight' of the dimensions involved in the scam.

Referring to the alleged banker-broker nexus, he said "Sebi was performing the role of a silent spectator."

"It is deep in Kumbhakarna-like slumber which it seems to be addicted to. It wakes up only when a scam occurs and reverts back to its slumber when the decibel-level of the scam comes down," Reddy charged.

He said he did not see any justification for the continuance in office of the Sebi chairman.

"We have strong reasons to believe that these brokers are preventing the unravelling of the broker-banker-politician nexus," the Congress spokesman alleged.

He said far from taking any preventive measures, the government had prodded public financial institutions into purchasing crashing shares held by defaulting brokers. In the process, the public financial institutions had lost billions of rupees, he alleged.

"The sad story of small investors who have lost tens of millions of rupees needs to be separately narrated," Reddy claimed, adding that from February 28 this year, the money lost amounted to Rs 1,600 billion.

According to Reddy, the government treated the "bear cartel with similar kid gloves."

He said that Anand Rathi had been caught indulging in insider trading and had not been arrested so far. Also, other bear operators including FIIs, which indulged in insider trading and took to hammering of shares, had gone scot-free.

He referred to his statement of March 3 this year wherein he had said that the finance ministry, RBI and Sebi had been idle spectators and "the small investor has again been shortchanged in this naked play of casino capitalism by vested interests."

He underscored that in the interest of bank depositors and small investors, his party demanded strong action so that "the full facts of this crony finance capitalism" indulged in Ketan Parekh and others of his ilk and bear operators brought out and punished "before the crisis deepens further and damages the credibility of our system yet again."

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