The Income-Tax Department has started scrutinising over 6.5 lakh demat accounts, which were frozen following 2006 IPO scam, to see if blackmoney was used to purchase equities by persons through multiple accounts. “Investigation and intelligence wings have started looking into the frozen accounts with substantial amounts lying in them to see if they are linked,” a revenue official said.
These accounts were frozen by the two depositories, National Securities Depository Ltd and Central Securities Depository Services Ltd, on January 1, 2007, after investors failed to comply with the Sebi’s directive to furnish details of their Permanent Account Number (PAN) while transacting in the financial markets.
The total number of frozen accounts had come down from a little over 43.5 lakh accounts on January 2007 to about 6.56 lakh accounts in January 2009, as some investors furnished PAN details.
The Government had found over Rs 1,200 crore in the frozen accounts, sources said.
The scrutiny or mapping of the accounts has been started from Mumbai, the country’s financial capital and later it would be extended to other parts of the country, the official said.
After the 2006 IPO scam, stock market regulator Securities and Exchange Board of India had made it mandatory for depository participants, and later investors to quote PAN for operating demat accounts.
The IPO scam relates to cornering of shares in 21 companies reserved for retail investors by scamsters through opening of fictitious demat accounts.
Sebi had set up a committee headed by retired Supreme Court judge Justice D P Wadhwa to probe irregularities in IPOs floated during 2003-2005, including those of Tata Consultancy Services, Jet Airways, Suzlon Energy, NTPC, Yes Bank and Shoppers Stop.