The Securities and Exchange Board of India (SEBI), the capital market watchdog, Thursday cracked down on some of the top brokerage firms and banks for their alleged involvement in an initial public offering (IPO) scam.
SEBI conducted investigations in respect of all the IPOs from January 2003 to December 2005.
The findings of investigations, prima facie, revealed violations of serious nature by several key operators, their financiers, concerned depository participants and the depositories.
In its order, SEBI has barred brokerage firms like Karvy Stockbroking and IndiaBulls from the market. It has also directed HDFC Bank and IDBI Bank not to open new demat accounts for share transactions. SEBI's Order fallout:
24 entities banned from primary and secondary market, including Indiabulls, Karvy Securities
• Quasi-judicial proceedings against Karvy DP and Pratik DP, banned from the market
• 12 DPs can’t open fresh demat accounts, including HDFC Bank, IDBI Bank, Central Bank, ING Vysya Bank, IL&FS and Motilal Oswal; 15 more under scrutiny, including ICICI Bank, Citibank, Stanchart
• 85 Financiers barred from the market.
SEBI said certain entities had cornered shares reserved for retail applicants in the name of fictitious entities in the initial public offerings of Yes Bank and Infrastructure Development Finance Company (IDFC).
Each of the fictitious application was of small value so as to be eligible for allotment under the retail category, it added.
After the allotment, these fictitious beneficiaries transferred these shares to their principals who in turn transferred the shares to their financiers.
The financiers in turn sold most of these shares on the first day of listing, thereby realizing the windfall gain of the price difference between IPO price and the listing price.
Stock Market Terms - Definition and Meaning
Stock Market Terms - Share Market Terminology - Investment Definitions, Financial Term Meaning A to Z
A - Active Share, Amortization, Application-Money Asset Coverage Asset Financing, Auction Market, Auctioning of an Issue, Automated Screen Trading (AST), Average, Averaging, Bear Cycle, Book Profit, Booking Profit, Broker, Book Value, BSE Sensitive Index or SENSEX, Bullion, Buy and Hold Strategy, Call Money, Capital Asset, , Capital Market, Cash Cow, CD or Cum – Dividend, Certificate of Deposit, Certified Cheque, Chinese Wall, Circuit Breaker, Clearing, Clone Fund, , Collection Ratio, Commodities Market, Commodity, Compound Growth Rate, , Correction, Cost-Benefit Analysis, Cover, Covered Call, Creeping Acquisition, CRISIL, Cum-Dividend or CD, Crossing, Cum-Rights or CR, Cumulative Preference Shares, Cyclical Shares - Daily Margin, Dawn Raid, Debentures, Defensive Investment, Defensive Stock, Delisting, Deflation, Delivery Order, Delivery Price, Dematerialization of Scripts, Depreciation, Derivative, Discounted Debentures, Discounting, Dividend Cover, Dividend Play, Dividend Rollover Plan, Dow Theory, Depository Receipt, Efficient Market Hypothesis, Eligible Securities, ELSS, Employee Buyout, Employee Participation, Employee Share – Ownership Plan, Equity Shareholders, Eurodollar, FIFO or First In First Out, FII, Fill or Kill Order, Fixed Income Investments, Floating Stock, Floor Broker, Floor Trader, FForward Dealing / Trading, Forward Delivery, Forward Shares, Forward Integration, Free Lunch Theorem, Free Market Economy, Front – End Load, Front – Running, Frozen Assets, Fully Diluted Earnings Per Share, Fully Paid Share Capital, Fundamental Analysis, Futures, Futures Contract, Futures Market Glamour Shares, Godfather Offer, Going Long, Going Private, Going Public, Going Short, Gold Certificates, Golden Handcuffs, Golden Handshake, Golden Share, Good Delivery, Good Faith Deposit, Graham and Dodd Strategy of Investment, Great Crash, Gross, Gross National Product (GNP), Growth Shares, Gun Jumping, Glamour Issue.Havala or Hawala (also, Making Up Price, Head and Shoulders, Hedging Against Inflation,Inefficient Market, Insider, Insider Trading, Insolvency, Institutional Investor, Intangible Assets, Interbank Market, Interest Rate Risk, International Finance Corporation, International Monetary Fund, Inventory, Inventory Turnover, Inverted Yield Curve, Investment Analyst, Investment Club, Investment Company, Investment Company Shares (Close – Ended), Investment Company Shares (Open – Ended), Investment Horizon, Investment Letter, Investment Trust, Investor Protection, IPO, Irredeemable Debentures, Issue Price.
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