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Sebi to begin fresh probe in 10-yr old IPO scam

Sebi to begin fresh probe in 10-yr old IPO scam
Markets regulator Sebi will re-investigate a nearly 10-year-old case of alleged IPO-related irregularities by some operators as ‘inconsitencies’ have come to the fore in its earlier order. The regulator will re-investigate the matter pertaining to Jayesh P Khandwala, proprietor of Zealous Trading Company, its role in IPOs of IDFC, Sasken and Suzlon, its alleged direct or indirect transactions, relations with other entities and the alleged gains made by him.

The matter first came to light in 2005. The Securities and Exchange Board of India (Sebi) has decided to re-investigate the matter as ‘inconsistencies’ have been found in the case. “...it is appropriate that Sebi look into these objections/inconsistencies and relationships among various players in a fresh investigation,” Sebi Whole Time Member Prashant Saran said in his order. Earlier, Sebi had prima facie found that Khandwala had made unlawful gains in the IPO <g data-gr-id="16">demat</g> scam. Thousands of fictitious accounts were created to corner shares. The Sebi probe into the IPO demat scam had found that Khandwala provided finance to various operators to make applications in the retail category of these initial share sale programmes. 

Sebi allows foreign venture funds to register as FPIs
Capital markets regulator Sebi on Friday said Foreign Venture Capital Investors (FVCIs) can be granted registration as a foreign portfolio investor if they meet certain guidelines. The announcement comes following a query from designated depository participant seeking clarification with regard to any restrictions on applicants, holding registration as <g data-gr-id="59">a FVCI,</g> from obtaining registration as <g data-gr-id="60">a FPI</g> (Foreign Portfolio Investor).

FVCI is an investor incorporated or established outside of India who can invest either in a domestic venture capital fund or a venture capital undertaking (domestic unlisted company), while FPI comprises of FIIs, sub-accounts and Qualified Foreign Investors. In the circular, Securities and Exchange Board of India (Sebi) said depository participants may consider an applicant, holding FVCI registration, for grant of registration as <g data-gr-id="56">a FPI.</g>

The capital markets regulator “do not expressly prohibit FVCI from holding registration as <g data-gr-id="54">a FPI.”</g> However, the registration is subject to certain criteria like the applicant complies with the eligibility criteria as prescribed under the FPI regulations.

Other criteria include funds raised, allocated and invested must be clearly segregated for both registrations, reporting of transactions must be done separately and there should be clear segregation of securities held under FVCI and FPI registrations. 
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