Chidambaram, Mehta Hold Talks On Crb Fiasco
Securities and Exchange Board of India chairman D R Mehta yesterday met finance minister P Chidambaram to discuss the Rs 1,000 crore CRB imbroglio.
Prime Minister I K Gujral is likely to hold a meeting to discuss the CRB fiasco on Wednesday. The meeting is to be attended by senior officials of the finance and home ministries and other concerned officials.
Sources disclosed that yesterdays meeting was on the report sought by the finance ministry on CRB. The sources said that another meeting would be scheduled later. Finance minister P Chidambaram, who is scheduled to leave for a week-long visit to Germany, will take a briefing on his return. Following yesterdays meeting between Chidambaram and Mehta, three Sebi executive directors, Pratip Kar, Vijay Ranjan, and Dharmistha Raval, left Mumbai for Delhi last evening.
In the wake of the Rs 1000-crore CRB scam, Sebi is now considering a move to define private placements. According to regulatory sources, such placements are prevalent in the developed markets, where, if a placement is made to more than 100 investors, filing and disclosure requirements need to be adhered to by the issuer.
Sebi, sources said, would, therefore, have to look at ways in which such a definition could be made.
By merely writing `for private circulation only and circulating it to a large number of investors does not make it a private placement, sources said.
The private placement aspect has been a major cause for concern in the CRB case since it is not regulated by Sebi and remains a grey area. Besides, the problem on the deposits and the lack of a charge on assets were also major regulatory loopholes in the CRB case. Sebi has argued it has nothing to do with this as it does not fall under its purview.
Sebi is expected to take stern action against more foreign institutional investors after it decided to slap a first-time fine on a foreign mutual fund. The markets watchdog has decided to adopt a tough posture on irregularities committed by errant FIIs.
A leading FII is set to face Sebis wrath for trying to hammer a stock ahead of a GDR (global depository receipt) issue, official sources said yesterday. Corporates are not going to be spared either, with Sebi getting ready to crack down on one of the countrys top corporates for market irregularities.