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Sebi hints at Pendse, Suzlon nexus

BS Markets Bureau in Mumbai

The Securities and Exchange Board of India has hinted at a possible nexus between former Tata Finance managing director Dilip Pendse and Suzlon Energy and its affiliate Sarjan Securities, which purchased 75,000 TFL shares in March 2001.

"There appears to be some quid-pro-quo in picking up of shares of TFL by Sarjan Securities and purchase of windmills from Suzlon," the Sebi report on investigations into Pendse says. Sarjan, an outfit of Suzlon Ltd, was by and large purchasing shares of TFL only.

Pendse has been found guilty of violation of Sebi's insider trading regulations in recent investigations into the affairs of Tata Finance by the Securities and Exchange Board of India. However, when contacted, Dilip Pendse denied any involvement and added that these windmills were purchased from the proceeds of a loan taken from a bank.

"Suzlon supplied windmills to the Tata group and it will not be surprising that, on account of obligations to Pendse, shares were purchased by Sarjan at a price (Rs 91) much higher than the market price (Rs 40)," the report said. Incidentally, Suzlon has given around Rs 5 crore (Rs 50 million) to Sarjan for the purchase of shares. Sarjan purchased around 618,000 TFL shares between June 2000 and April 2001. "This is the only instance where the company has given funds to an employee for purchase of shares," the Sebi report says.

According to the report, Tata Finance purchased about 13 wind mills from Suzlon while Khuda Gawah Investments and Nalini Properties, purchased one wind mill each. During 2000-01, TFL purchased the windmills at a cost of around Rs 350 crore. Pendse had proposed to buy these as a tax-planning measure. Tata Finance is now planning to dispose off its windmills division.

The connection between Pendse and Sarjan has been established in the Sebi report as follows: Pendse's wife Anuradha Pendse, his associate Anjali Beke, Nalini Properties and Ajudi Properties & Investments sold 290,000 shares of TFL in off-market deals to brokers and they in turn sold the shares to India Emerging Companies and Sarjan Securities.

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