The Telegraph
Since 1st March, 1999
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Jaiprakash picks up Harshad shares

Calcutta, April 9: The promoters of Jaiprakash Industries — the Jaiprakash Gaud family — have bought around 18 lakh shares of the company from the custodian appointed by the special court dealing with the securities scam in the early nineties.

These shares were seized by the custodian from stockbroker Harshad Mehta — the protagonist of the scam — and his accomplices, and were sold through auctions earlier this year. A senior official in the custodian’s office confirmed the deal with the Gaud family.

This was not a one-off deal. Earlier this year, the custodian sold shares of a number of other companies in large volumes to the Life Insurance Corporation of India (LIC).

The custodian is reported to have raked in over Rs 200 crore by selling shares seized from ‘notified persons’ or those found guilty of manipulating the market.

The Gaud family held 45.99 per cent of Jaiprakash Industries’s shares as of December 31, 2002. With the acquisition of 18 lakh shares from the custodian, for which they are reported to have paid around Rs 5 crore, their stake in the company has gone up to 47 per cent.

A well-known Delhi-based stockbroker Harish Bhasin had amassed a 14 per cent stake in the company a couple of years ago. The promoters had said in response that Bhasin could not topple them since they held over 50 per cent stake in the company.

The promoters’ stake in the company had gone down to around 42 per cent at the end of 2001. But they shored up their holding in February last year by way of a preferential allotment of 1.39 crore shares. The Gaud family shelled out around Rs 50 crore for the shares.

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