Sebi-Rbi Meet On Canstar Next Week
Sebi, the Reserve Bank and government officials are likely to meet next week to discuss the Canstar issue. Sebi has asked the main sponsor bank, Canara Bank, to meet its commitment on the redemption price of Canstar units.
Sources said Sebi was examining options to bar Canara Bank from accessing the capital market for a specific period of time.
A letter has already been sent to the ministry of finance and the Reserve to this effect, the sources added.
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The capital market watchdog is careful about taking any action in this case as the scheme was launched in 1990 when Sebi was not approached for approval.
The mutual funds were then outside its purview.
Besides, the bank does not directly come under the purview of the Sebi regulations and the RBI needs to be consulted before deciding on the course of action.
However, the sources added that the Sebi regulations provide for allowing it to take action against any entity irrespective of the regulator that governs such an entity in the interest of the investing public. Recently the regulator stopped Jenson and Nicholson from accessing the capital market for two years for cancelling the rights issue after the completion of all formalities pertaining to the issue.