Blue chips face probe for share irregularities
TEN companies are being investigated by the Securities and Exchange Board of India and the Department of Company Affairs for allegedly switching shares and issuing duplicate shares without proper verification of loss.
They include Tata Iron and Steel Co, the flagship company of the Tata group, Grasim Industries, the main company of the Aditya Birla group, and the high-flying Reliance Industries Ltd. The others under investigation are Tata Engineering, Industrial Credit and Investment Corporation of India, Tata Chemicals, State Bank of India, Essar Gujarat, Indian Petrochemicals and Mahanagar Telephone Nigam Limited.
'We are probing the top 10 companies to ascertain if switching of shares and issuing of duplicate shares are common market practices,' finance secretary Monetek Singh Ahluwalia said. Sources said the companies had been chosen on the basis of their market capitalisation and trading volumes at the major stock exchanges.
The shares switching episode was brought to light when the Unit Trust of India complained that five million Reliance shares sent by it for transfer to Reliance Consultancy Services (RCS) had been switched with Reliance shares belonging to other firms or individuals.
RCS alleges share switching is common practice.
