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April 4, 2001
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Money > Business Headlines > Report April 4, 2001 |
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DP transactions to be tracedJanaki Krishnan in Bombay Depository participants, who have been raking it in with shares lying in their accounts, are set to feel the heat with the scope of investigations into the stock market widening. According to sources investigating the case, the Securities and Exchange Board of India will be seeking details from DPs as it is suspected that some of the DPs have lent out demat shares lying in their clients' accounts to brokers. This will ultimately show up in the statement of transactions which is automatically generated every 15 days in the form of a debit and credit entries, and vigilant investors can probably find it out if their scrutinise their statements carefully. The suspected violations are expected to be found in the case of DPs in New Delhi and Calcutta since "it has happened in close nexus with brokers in these two cities," the sources said. While certain DPs such as Stock Holding Corporation of India and Deutsche (which offer custodial services) are authorised to lend out idle shares lying in their accounts, by their clients, there is evidence to show that unauthorised lending may also have taken place. Sources said that sometime the volumes in trading in some of the stocks has far exceeded that what can be justified by the known floating stock of the scrip concerned. In the immediate aftermath of the market crash one of the first things that Sebi did was to ask custodians to desist from stock lending as it is suspected that a large number of shares have entered the market-place this way.
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