The Securities and Exchange Board of India (SEBI) on Friday announced the distribution of Rs 14.87 crore in its third tranche to 2.58 lakh investors affected by irregularities in 21 initial public offerings (IPOs) between 2003 and 2005.
This amount will be distributed to investors whom partial amounts were paid earlier. As many as 115,465 investors out of 258,301 investors would be paid the eligible amount in full and the remaining would be paid in part, Sebi informed.
The distribution of the third tranche started on August 17, 2023. The funds are being directly credited to their bank accounts. In cases where bank details are not available, payment warrants are being sent to their last known addresses.
Investors who have received credit intimation but have not received the money in their bank accounts or have other queries can contact Sebi at “iporeallocation3@tcplindia.co.in” before January 31, 2024.
The Background Story
Sebi had investigated certain irregularities in 21 IPOs between 2003 and 2005 where certain individuals who cornered shares in bulk before they were listed. Upon completing the probe, Sebi instructed those involved to return their unlawful profits and initiated a recovery process. It identified the assets of defaulters for recovery and distribution to investors.
A Supreme Court-appointed committee identified 13.57 lakh individuals eligible for compensation. Sebi had already disbursed Rs. 23.28 crore in April 2010 and Rs. 18.06 crore in December 2015. Among the total eligible investors, 10,01,890 received their complete eligible amount, while 97,657 investors were excluded due to associated costs. Now, the rest of the eligible investors are receiving the disgorged/recovered amount.
Irregularities in IPO; How It Reached Supreme Court?
In 2005, Sebi detected unusual off-market transfers of unlisted shares in huge quantities. It then found irregularities in 21 IPOs from 2003-2005.
It found that the accused Roopalben Pancha and her associates orchestrated a mass acquisition of shares meant for retail investors through fake demat accounts. Several entities of Hyderabad-based Karvy group and several other companies were named perpetrators. Sebi sought recovery and redistribution of assets to investors who missed out receiving the shares. To decide who should get compensation, a Supreme Court committee, led by D.P. Wadhwa, outlined a strategy to identify and reallocate shares to the eligible retail investors
