No Answers Yet, A Year After Scam

From Budget 2002 to Budget 2003, it has been a long walk on Dalal Street.

Most of the stock markets players who were held responsible for the 300 points crash in the aftermath of the last Budget are still out of action even as the roller-coaster ride continues on the bourses.

Four Securities and Exchange Board of India (Sebi) investigative reports (running into several volumes and thousands of pages), two Reserve Bank of India reports and dozens of depositions before the Joint Parliamentary Committee (JPC) later, nobody is sure who to blame for the last year's post-budget market crash.

Former Sebi chairman D R Mehta, who came on the firing line, had virtually said that there was no scam.

He, however, could not explain in that case why did Sebi initiate a probe at all. Away from the din and bustle of the markets, Mehta is now in Jaipur chasing his life-long passion -- helping the disabled and uplifting poor women.

The prime accused Ketan Parekh is out on bail. Perceived to be the protagonist of the drama, he has still to pay up his dues to the scarred Madhavpura Mercantile Bank, while his debt of Rs 137 crore to Bank of India is now being dealt with by the Debt Recovery Tribunal.

Saddled with a plethora of court cases, Parekh is "officially" banned from the capital markets.

First Global chief Shankar Sharma, who was drawn into the Tehelka tapes controversy (despite his protestations of being an angel investor in the dotcom company), has just been granted bail after being pinned down by the Enforcement Directorate which was investigating his alleged foreign exchange violations.

Shankar has shut down his business in India. If market sources are to be believed, he has shifted his focus abroad.

Anand Rathi, the former president of the Mumbai Stock Exchange, who was in the eye of the storm for allegedly seeking privileged information on trading positions, resigned from his post.

His trading firms were barred from the capital market. Rathi is, however, back is business as the nine-month ban on his firms expired on December 12, 2001, even before the cases against him could be concluded.

On Budget day, the Securities Appellate Tribunal (SAT) modified the ban on Rathi from holding a position in any capital market public institution for a period of two years to one year. The ban will end on March 12.

Sebi had initially held few corporates responsible for market manipulation and initial indications seemed to be that the markets watchdog -- which had been baring its teeth for so long -- might finally bite.

But the latest Sebi reports have virtually exonerated most of them. Clean chits have been given to Zee Telefilms and Himachal Futuristic. On the broking side, J M Morgan Stanley has also been exonerated. Another firm, CSFB, has closed its broking arm in India.

In some cases, investigations could not make a headway for altogether different reasons. Big time broker Nirmal Bang died. Preliminary investigations had implicated him and his entities in circular trading practices in some major scrips along with Shankar Sharma.

Closely related to the market crisis was the Unit Trust of India's (UTI) US-64 scam, which claimed the scalp of P S Subrahmanyam, the UTI chief. The case is being investigated by the Central Bureau of Investigation. M M Kapur, the man in charge of US-64, was arrested by CBI along with a number of other officials. Kapur died of heart attack.

While the dramatis personae were in and out of the limelight, the stage for their play -- the Indian capital market -- has changed for ever. The market has undergone a radical transformation between the two budgets : 100 per cent rolling settlement, abolition of weekly settlement system and introduction of uniform settlement system across the bourses and the arrival of derivatives.

India is one of the three countries in the world that have introduced futures in individual stocks.