Introduction: The Securities and Exchange Board of India (SEBI) has recently initiated the third phase of distributing recovered funds to the investors affected by irregularities in the IPOs issued during 2003-2005. This move reflects SEBI’s ongoing commitment to ensuring the rights and interests of investors are safeguarded.
Detailed Analysis:
1. Backdrop of the IPO Irregularities: Between 2003 and 2005, certain discrepancies were observed in the shares issued via 21 IPOs. These irregularities were noted before these IPOs got listed on the stock exchanges. SEBI took the helm and launched an investigation, subsequently directing various individuals to return their ill-gotten gains.
2. The Role of the Wadhwa Committee: Justice D.P. Wadhwa, an ex-Supreme Court Judge of India, spearheaded the ‘Wadhwa Committee’. This committee was tasked with establishing a procedure to identify the affected individuals from these IPOs and recommended how their shares should be reallocated. As per their findings, a whopping 13.57 lakh individuals were ascertained as eligible for distribution.
3. Previous Disbursements: Before this current phase, SEBI had already disbursed amounts in two batches:
- April 2010: Rs. 23.28 crore was distributed.
- December 2015: Rs. 18.06 crore was distributed.
From the identified eligible investors, 10,01,890 received their full entitled amount, while 97,657 investors were not compensated due to associated costs.
4. Details of the Current Disbursement: On August 17, 2023, SEBI initiated the third tranche for distribution. This current phase sees a distribution of Rs. 14.87 crore to 2.58 lakh investors. This includes individuals who previously received partial amounts and are now due additional funds. Breaking it down:
- 1,15,465 investors will receive their full eligible amount.
- 1,42,836 investors will receive a partial amount.
For ease of distribution, SEBI is directly crediting amounts to investors’ bank accounts wherever possible. Those without accessible bank details will receive payment warrants at their last known address.
5. Key Resources and Contact Points: SEBI has made the list of eligible investors and the respective amounts they’re entitled to available on their official website. Additionally, investors with concerns or queries regarding the process have been provided with specific contact points, including email IDs and physical addresses, ensuring transparent communication.
Conclusion: SEBI’s consistent efforts in addressing the IPO irregularities from 2003-2005 showcase its dedication to upholding investor trust and market integrity. By initiating this third tranche of distribution, SEBI not only compensates those affected but also sends a strong message about the importance of adhering to fair practices in the market.
*****
Securities and Exchange Board of India
PR No.18/2023
SEBI initiates third tranche of distribution of disgorged / recovered amount to investors in the matter of IPO irregularities
SEBI had investigated into certain irregularities in the shares issued through 21 Initial Public Offerings (IPOs) during the period 2003-2005 before their listing on the stock exchanges. Upon completion of the investigations, SEBI had, inter-alia, directed certain persons to disgorge the illegal gains.
Under the Chairmanship of Justice D.P. Wadhwa, former Judge of Supreme Court of India, a committee was set up namely ‘Wadhwa Committee’, which recommended the procedure of identification of persons who have been deprived in the said IPOs and the manner in which reallocation of shares to such persons should take place. As per the recommendations of Wadhwa Committee, 13.57 lakh persons had been identified as eligible investors for distribution. SEBI has already distributed Rs. 23.28 crore in April 2010 and Rs. 18.06 crore in December 2015. 10,01,890 investors out of the said 13.57 lakh investors were paid the full eligible amount and 97,657 investors were excluded due to the costs involved.
SEBI has initiated the third tranche for distribution of Rs. 14.87 crore to 2.58 lakh investors from the disgorged/recovered amount in the matter of IPO irregularities on August 17, 2023. In the current exercise, SEBI is distributing amounts to those investors to whom partial amounts were paid earlier and are entitled to receive additional amounts. 1,15,465 investors out of 2,58,301 investors would be paid full eligible amount and the remaining 1,42,836 investors would be paid in part.
Wherever the bank details of the eligible investors are available, the amount is being credited in their bank accounts with an intimation to the investors. In cases where bank details are not available, payment warrants are being sent to the last known address of the investors. The list of eligible investors along with amount to be credited/sent by SEBI is available on SEBI website :
https://www.sebi.gov.in/sebi_data/commondocs/aug-2023/List_of_investors_Tranche_3_p.pdf
The investors who have received credit intimation and have not received the credit in their bank account or have any other queries relating to payment, revalidation, modification, etc., may raise such queries on or before January 31, 2024 at the office of the Facilitator Registrar – TSR Consultants Private Limited, Unit SEBI-IPO Reallocation – Tranche 3 at C-101, 1st Floor, 247 Park, Lal Bahadur Shastri Marg, Vikhroli (West), Mumbai – 400 083 (email id: iporeallocation3@tcplindia.co.in) or at the office of Recovery and Refund Department, SEBI Bhavan II, Plot No. C-7, Block ‘G’, Bandra Kurla Complex, Bandra (East), Mumbai–400051 (email id: ipotranche3@sebi.gov.in).
Mumbai
August 24, 2023
