In a first, duped investors get money back

NEW DELHI: Delhi-based investor Suman Parakh is a little bemused at the Rs 300 cheque she got from finance minister Pranab Mukherjee. “I don’t know what to say. Should I be happy or feel sad, I don’t know,” she says with a confused expression on her face.

Ms Parakh is among the 13 lakh investors who’ll benefit from stock-market regulator Sebi’s disbursment of disgorged amount from IPO irregularties of 2004.

“This is a significant milestone since this is the first time that not only the manipulators are being penalised but the amount recovered is being redistributed to the persons who were deprived of their gains,” said Mr Mukherjee at a function to mark Sebi foundation day.

It has been a long journey for investors such as Suman Parakh who had to wait for the committee under the chairmanship of justice D P Wadhwa, (former judge of the Supreme Court of India) to advise on the procedure for identification of persons who might have been deprived on account of IPO irregularities.

The committe was set up following an assurance by the then finance minister P Chidambaram to the Lok Sabha that steps would be taken to compensate persons who had lost out on allocation of shares on account of the IPO scam.

It took almost five years to implement those recommendations, as Sebi appointed an administrator in February 2010 who has since identified 12,74,736 unsuccessful IPO applicants who may have benefited had the scam not happened.

The finance minister said that this should go a long way towards making the investors feel safe and secure while investing in the stock markets.

Already, proceedings against 105 entities has started who cornered shares meant for retail investors in 21 IPOs, including IDFC, NTPC, TCS, YES Bank and Suzlon Energy, during 2003-05 by opening multiple fictitious demat accounts.

“Well, I would have Rs 25,000 if the share were allocated to me. But I think even Rs 300 is not too bad, what I have gained is the faith in the system,” says Ms Parakh.

The finance minister also asked Sebi to double its efforts in protecting and promoting the interests of all investors and making India the best investment destination.