No Point In Raising Ruckus Over Scrip Battering: Sbi Chief

In a related development, Jardine Fleming, which has been accused of having hammered down the State Bank of India scrip ahead of the banks recent GDR issue, has written to 38 top government functionaries, including the finance minister, stating that fund manager has not in any way jeopardised the GDR issue and has on the contrary contributed in its success.

Kakodkar told Business Standard that given the better settlement procedures and better infrastructure in the international markets, it is only natural for a foreign institutional investor to sell off its holding in the Indian market and replace it with a GDR holding.

 

This is a phenomenon which has been witnessed worldwide and one wonders why so much of noise is being made about this in India, said Kakodkar.

We must not also forget that the fund management business and the investment banking business of most of the foreign investment houses are independent of each other and it is hence incorrect to assume that if the mandate for a GDR has not been given to a particular firm it would resort to downloading shares out of vengeance, said Kakodkar.

Sebi is looking into the matter but I personally feel that the market forces determine the movement of the share price. The same happened in the case of the recent spurt in the SBI scrip on kerb deals following the CRR cut, said Kakodkar.

Jardine Fleming has been accused of having hammered the price of the scrip as it had not been given the mandate for managing the GDR issue of the bank.