Sebi shares GDR probe finding with govt

Market regulator the Securities and Exchange Board of India (Sebi) today said it was in touch with the government on the GDR manipulation scam.

"We are in touch with the government on this as GDRs are managed by them and we are sharing the information with the government," Sebi Chairman UK Sinha said.

The Sebi has banned seven companies and some entities for manipulating share prices using global depository receipts (GDRs).

The Sebi has detected anomalies like fixing of higher value of GDRs compared to total capital of the company, which in some cases have been found eight times high.

Post the GDR scam, the government may consider Sebi to regulate GDRs and take a re-look into such issues, but Sinha declined to speak about it.

A Crisil study has revealed that investors have lost money in 85% of such issues.

A GDR is an instrument that is listed on an exchange outside the domestic market of the issuer and denotes a fixed number of a company's shares as the underlying asset.

Once listed, it can also be converted into equity shares of the issuing company.