Calcutta, Sept. 29: The Stock Holding Corporation of India Ltd (SHCIL) has appointed chartered accountants Sailesh Haribhakti to probe dubious dealings with Harish Chandra Biyani and other brokers in March 2001.
SCHIL, the country’s largest depository participant and custodian of securities, has been under investigation and was hauled up by the Securities and Exchange Board of India (Sebi) for abuse of its ‘sell-n-cash’ scheme.
SCHIL got dragged into a controversy after Harish Chandra Biyani and his associate firm Biyani Securities—both members of the Calcutta Stock Exchange—colluded to deal in the shares of DSQ Industries under the ‘sell-n-cash’ scheme and defrauded IndusInd Bank in the process.
Sebi’s inquiry has unearthed more shady deals, which the market regulator says it wants to probe further. “As an institution, SHCIL was required to ensure fairness, transparency and integrity in its operation to facilitate an efficient securities market,” Sebi said in a report recently submitted to the Joint Parliamentary Committee.
“However, these objectives appear to have been set aside by the management in order to assist and abet fraudulent and unfair trade practices. It is surprising to note that despite being promoted by leading public sector financial institutions, SHCIL did not follow prudential norms and regulations while conducting its business.”
SHCIL was promoted by the Industrial Development Bank of India, Life Insurance Corporation of India, Unit Trust of India and General Insurance Corporation, among others.
SHCIL’s managing director K. C. Bandyopadhyay confirmed the appointment of Sailesh Haribhakti for an “independent audit” of the dealings in March 2001.The chartered accountants have started questioning officials and visited the Calcutta office recently. “They are free to examine any document and can interview all officials. We have not, however, set them any deadline to produce their report,” he added.