Sebi dispenses recovered funds to investors hit by IPO irregularities

MUMBAI: Investors, who lost out on their initial public offering (IPO) opportunities almost a decade ago, will be getting some portion of their amount this week.

The Securities and Exchange Board of India( Sebi) has started distributing recovered amount to investors who were affected by IPO irregularities.

The regulator on Thursday said it has initiated the second tranche of distribution of Rs . 18.06 crore to 4.63 lakh investors.The amount would be distributed to investor across the country on December 18,2015.

“Wherever the bank details of the eligible investors are available,the amount would be credited in the said account with an intimation to the investors. In the cases where bank details are not available, the cheques would be sent to the last known address of the investors,“ Sebi said in a statement posted on its website.

In the present tranche-2 distribution, 2.02 lakh investors would be paid full eligible amount,while the remaining 2.60 lakh investors would be paid in part.

“Sebi is continuing its recovery process by identifying assets of the defaulters etc for recovering and distributing the same to the remaining investors,“ it said.

Investors who have received credit intimation and have not received the credit in their bank account or any queries relating to payment would be taken on or before May 31,2016,the regulator said.

There were certain irregularities in the shares of 21 IPOs during the period of 2003 to 2005 before their listing on the stock exchanges.The regulator after completing its investigation in the matter had directed certain people to disgorge the illegal gains.

A committee was also set up under the chairmanship of Justice D P Wadhwa, former Supreme court judge, to look at the IPO irregularities matter. The committee recommended the procedure of identification of persons who were deprived in the said IPOs and manner in which reallocation of shares to such person should take place.As per its recommendations,12.75 lakh persons were identified as eligible investors for distribution.

In April 2010, Sebi had already distributed Rs. 23.28 crore to 12.75 lakh investors,out of which 7.99 lakh investors were paid the full eligible amounts.

In the current tranche-2 exercise, the regulator is distributing amounts to those investors to whom partial amount was paid earlier and are entitled to receive additional amounts.