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’06 IPO scam case: Sebi passes consent order

’06 IPO scam case: Sebi passes consent order
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First Published: Thu, Feb 19 2009. 12 53 AM IST
Updated: Thu, Feb 19 2009. 12 53 AM IST
Mumbai: The Securities and Exchange Board of India, or Sebi, on Wednesday passed a consent order settling a case against ING Vysya Bank Ltd in the initial public offering, or IPO, scam of early 2006.
According to the capital markets regulator’s order, ING Vysya Bank has “without admitting or denying charges remitted a total sum of Rs4 lakh”.
During the IPO scam, thousands of fictitious online accounts had been created to corner shares set aside for small investors, and later transfer them to larger financiers. Sebi had passed an ad-interim ex parte order in April 2006 directing the bank “not to open fresh demat accounts as a depository participant till further directions”.
The Wednesday consent order means the bank can resume opening new demat accounts.
Sebi also said that the bank while acting as a depository participant had “allegedly failed to exercise due skill, care and diligence while opening 2,075 demat accounts with common addresses and 544 afferent accounts and thereby facilitated cornering of shares meant for retail individual investors”.
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First Published: Thu, Feb 19 2009. 12 53 AM IST
More Topics: Sebi | ING Vysya | IPO Scam | Demat Account | bank |