Mumbai, July 14: SEBI has decided to send a team of officials to verify the cause of failure on the part of BoI Shareholding to deliver shares on time to custodians. The regulator has also asked Bank of India, BoI Shareholding and the Bombay Stock Exchange to furnish a copy of the audit report on the clearing house carried out by Bank of India.In a related development, the Stock Holding Corporation of India (SHCIL) has asked Sebi to verify the claims of BSE that the shares were not stolen from the clearing house.
The amount of shares undelivered had touched a high of Rs 114 crore before the matter was brought to the notice of the regulator and a massive cleaning up exercise was launched by Bombay Stock Exchange and its clearing house. The shares have since been reconciled. Sebi, which was waiting for the shares to be reconciled, has now decided to send a team of officials to the clearing house to get to the bottom of the entire problem.
And even though there is a feeling within the Sebi top brass thatthe mess was more a matter of gross inefficiency owing to severe industrial relations problem, there is a feeling among a section of the market that there could be an element of manipulation.
"We have sought the audit report carried out by Bank of India and will examine its contents," said a top Sebi source.
Market sources, however, confirmed that the regulator has written to all the three entities involved with the clearing house to furnish a copy of the audit report.
These sources also confirmed that a team of Sebi officials would be visiting the clearing house to undertake an on-the-spot verification.
Sources added that SHCIL, which had borne the bulk of the brunt for the delay in delivery of shares, had in its letter to Sebi asked the regulator to verify the claims of BSE that there had been no theft of shares at the clearing house.
The regulator's intervention had been sought for an independent verification as in its capacity of a custodian there was no way in which SHCIL could have checked theexact reason for the delay in delivery.
SHCIL is miffed at the fact that it has lost out on custody fee as these shares were not in its custody for almost two months in some cases. SHCIL has sought compensation from BoI Shareholding for interest payment for the period of delay and also the loss of corporate benefits for delay in sending the shares for registration. The other two custodians who had received deliveries late were Deutsche Bank and Citibank.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
