Nothing Right

The government has allowed companies to charge high premium on rights issues without any check whatsoever. At the time of issue, the prices can be manipulated. But as soon as the issue is over, prices start falling much below the level at the time of allotment. This has been going on since the time the post of controller of capital issues was made ineffective. Because of this move, investors have lost heavily.

It is, therefore, the government's duty to force these companies to pay atleast 14 per cent interest on rights premium. They will still be gainers as they have to pay more than 18 per cent interest to banks or financial institutions. If the government does not do so, the fate of the investors is sealed. Not only have the premium charges vanished, scrips are being quoted even below the face value. This amounts to cheating.