Search the Internet          Tips  Sites: Finance, Investment

Sebi seeks Sharma's written submission

BS Markets Bureau

The Securities and Exchange Board of India finished with the hearing of Shankar Sharma of First Global at its board meeting on Monday.

Chairman G N Bajpai told reporters at the end of the meeting that Sharma has been asked to make a written submission to the board.

The Sebi board also discussed the takeover issue of bringing preferential allotment under the purview of the takeover code but nothing was finalised.

"We will let you know as soon as we reach a decision," Bajpai said.

Shankar Sharma has been implicated in the market crisis of March 2001, where the Bombay Stock Exchange sensex crashed by more than 170 points a day after the Union Budget was announced by finance minister Yashwant Sinha.

Sebi barred the brokerage firm from undertaking any capital market-related activities in the country, against which order Sharma had appealed to the Securities Appellate Tribunal.

The tribunal has been asking Sebi to finalise the entire investigations against Sharma but the regulator has overshot each deadline fixed.

A sub-committee of the working group on takeovers headed by former chief justice P N Bhagwati had earlier this year recommended that change in management control in a company through preferential allotments should attract the provisions of the takeover code.

Which means that if as a result of a preferential allotment the stake of any shareholder in the company touched 15 per cent, that shareholder would automatically have to make an open offer for minimum 20 per cent stake. At present such allotments are exempt from the takeover code.

However when the full committee met, this proposal was shot down - apparently at the instigation of the powerful corporate lobby. The Sebi board is expected to be the final arbitrator on this issue.

Powered by

ALSO READ:
The SEBI Story
The Capital Markets Crisis
The Rediff Budget Special
The Rediff-Business Standard Special
Money