Sebi drops all charges against NSDL

Sebi drops all charges against NSDL
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First Published: Tue, Feb 02 2010. 10 55 PM IST

Relief move: Sebi chairman C.B. Bhave. Ashesh Shah / Mint
Relief move: Sebi chairman C.B. Bhave. Ashesh Shah / Mint
Updated: Tue, Feb 02 2010. 10 55 PM IST
Mumbai: India’s capital market regulator on Tuesday withdrew all charges against National Securities Depository Ltd (NSDL) in a case relating to the opening of fictitious demat accounts used to corner shares meant for retail investors, an official said.
At a board meeting, the Securities and Exchange Board of India (Sebi) disposed of a show-cause notice issued to NSDL, effectively clearing it of all pending charges, said a Sebi official, who didn’t want to be named.
Relief move: Sebi chairman C.B. Bhave. Ashesh Shah / Mint
NSDL is a national depository that holds securities in dematerialized, or electronic form.
In 2006, Sebi had charged NSDL and other intermediaries with facilitating the opening of at least 59,000 fictitious accounts that were ostensibly meant for retail investors in initial public offerings during fiscal 2003-06.
A group of large investors used fake identifies to open demat accounts that were used to corner shares meant for retail investors.
Sebi chairman C.B. Bhave was the NSDL head at that time. After joining Sebi in 2008, he recused himself from Sebi board hearings of the NSDL case, citing conflict of interest. He also recused himself from Tuesday’s meeting.
Tuesday’s decision comes after Sebi in November 2009 declared “null and void” two of three decisions by a special committee set up to examine NSDL’s role in the case. The board had at the time decided to hear the matter afresh.
anirudh.l@livemint.com
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First Published: Tue, Feb 02 2010. 10 55 PM IST
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