SHCIL chief gets marching orders

MUMBAI: Stock Holding Corporation of India’s (SHCIL) chairman and managing director chief R Jayaraman Iyer has been asked to proceed on indefinite leave by the shareholders of country’s largest depository service provider.

This follows allegations that Mr Iyer divested equity stake of SHCIL Services, its subsidiary, to private parties without seeking approval from the board.

The decision was conveyed to Mr Iyer on late Friday evening while R K Bansal, chief general manager in-charge of Mumbai zone at IDBI Bank, has been asked to take temporary charge. SHCIL, is one of the largest custodian and depository participant at Bombay Stock Exchange and National Stock Exchange.

SHCIL Services provides equity broking services for retail and institutional investors and has about 140 branches spread across the country. IDBI, LIC, IFCI, SUUTI and GIC hold above 51% shares in SHCIL.

Sources that an internal committee would be set up to investigate the matter. The members of the committee will be finalised early next week. “There are lot of loose ends that need to be investigated. The committee will look in the entire gamut of things,” senior officials from the financial institution told SundayET.

Sources said that committee will also invest other subsidiaries of SHCIL which are apparently involved in business activities such as information technology.

“SHCIL Services was a 100% subsidiary of SHCIL. However, the shareholders were not informed about dilution of 76% stake in the subsidiary to private entities,” the sources said. The shareholders have alleged that Mr Iyer had full knowledge of these development.

The sources further said that SHCIL Services was floated a few years ago as Depository Company of India in 2005 but later it was renamed in 2006. Later, 76% equity was divested among two-three shareholders. Mr Iyer was earlier the executive director of IDBI and subsequently he moved to SHCIL about couple of years back after B V Goud left under cloud.