Jpc Not To Comment On Role Of Firms In Stocks Scam

The joint parliamentary committee (JPC) on stock scam has decided to skip the issue of corporate role in price rigging as it feels that it does not have adequate supporting evidence.

The committee which is in the final stages of preparation of its report, is instead likely to proceed on the other aspects of the scam including the possible delay by the finance ministry and the Securities and Exchange Board of India as well as the depository participants in responding to the warning signals like pay-in problems faced by brokers.

Sources close to the committee said it has been decided to submit the report by the end of the current session of Parliament. Accordingly, the committee had told Sebi that it should submit a report of at least half a dozen companies which have indulged in price rigging of their shares by colluding with brokers. The market regulator has, however, not submitted the report till date and sources said it is now too late to sift through the evidence.

On prodding by several members, the JPC had earlier this year decided to ask several heads of companies to depose before it. But the plan fell through as the committee did not have adequate information from the prosecuting agencies to frame a list of wrongdoings.

In its second interim report, Sebi had pointed the needle of suspicion at several companies which had created either shell companies to invest in the shares of the original companies or had paid brokers to encourage the same.

But while the JPC is expected to comment adversely on the warning system of the bourses and of these with Sebi, it has decided not to go ahead by directly naming companies.

It is also hamstrung by the fact that an inter-departmental committee including the DCA, CBDT, Sebi and ED has not been able to really provide any conclusive evidence of any systemic wrongdoing by the companies referred to it.

Sources said the committee will resume its examination of the initial draft from July 22. While a final decision on the corporate aspect is expected to be taken in the meeting then, the sources added that the focus has also got diluted by the addition of UTI's problems in the terms of reference of the committee. A substantial part of the committee's hearings this year was on UTI.