Stock Holding Corporation of India has dragged its own broking arm SHCIL Services to the Company Law Board and sought a probe after it was found the management misused authority and secretly agreed to sell up to 40 per cent stake to a doubtful foreign investor. | |
| SHCIL, the country's largest custodian of securities, has also accused SHCIL Services's chairman and managing director R Jayaraman Iyer, chief executive S Ramanathan and six other directors of fraud and mismanagement. |
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| Incidentally, Iyer was also CMD of SHCIL and Ramanathan executive vice-president when the alleged fraud was committed. The two officials have since been reportedly removed by the SHCIL board. |
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| The other directors - V Subramaniam, Vivek Vaishnav, R Ravindran, Quek Jin Oon, Lee Keen Whye and Nitin Jog - were also on the payroll of SHCIL till early 2006. |
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| Acting on the plea, CLB chairman N Balasubramanian issued notices to all directors and froze their voting rights. |
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| SHCIL is jointly promoted and owned by financial institutions and banks such as LIC, GIC, ICICI Bank, UTI, IDBI and IFCI. It is the country's largest depository company. |
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| In its plea, SHCIL alleged Iyer and Ramanathan "deliberately and with ulterior motive" allotted shares of SSL to Singapore's E-Ventures Capital by FDI route. After allotment, SHCIL was left with only 24 per cent stake in SSL. |
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| "The shares were allotted in a clandestine and surreptitious manner without proper due diligence and proper identification... Thereby changing the management control," SHCIL contended in its petition. |
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