Sucheta Dalal :SHCIL & SSL hold eventful AGMs
Sucheta Dalal

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SHCIL & SSL hold eventful AGMs  

Sep 7, 2007



 

Celebrating control

The controversial Stock Holding Corporation of India Ltd (SHCIL) and its subsidiary SHCIL Services Limited (SSL) held their Annual General Meetings last week. SHCIL, which had lost control over its subsidiary SSL (its rogue CEO R.Jayaraman Iyer had clandestinely reduced its shareholding to 24%, right under the noses of the institutional shareholders) made it a point to hold the meeting at SSL office at the Bombay Stock Exchange Building (Jeejeebhoy Towers) in South Mumbai. After all, it had gained control over the board and was triumphantly getting control over SSL’s capital as well by diluting the other shareholders by infusing fresh capital into SSL through a preferential allotment to the parent SHCIL. SHCIL now holds nearly 80% of the shares again. However, we learn that the Singapore based shareholder, E-Ventures capital Pte Ltd., and an Indian shareholder who benefited from the clandestine allotment have moved the Mumbai High Court against SHCIL’s attempt to dilute their holding.

 

SHCIL wants NSE membership

SHCIL’s discredited CEO, R Jayaraman Iyer and his co-conspirator S.Ramanathan (CEO of SSL) had diluted SHCIL’s holding in its subsidiary SSL by claiming that it was a necessary condition to getting membership of the National Stock Exchange. Ironically enough, item 12 of the SSL’s AGM agenda claims that the infusion of Rs 2.5 crore of capital by SHCIL (approved at the AGM on 3 September) was also to obtain membership of NSE.  SSL is already a member of the Bombay Stock Exchange. Will the NSE approve of the membership as quickly as the BSE did at the time when the head of SHCIL was flaunting his close friendship with the SEBI chairman M.Damodaran and Whole Time Director S.G.Anantharaman?

 

 

 

Alone in a crowd

The CEO of SHCIL Services, S.Ramanathan apparently turned up at the SSL AGM on 31 August, held at the SSL office located in the Bombay Stock Exchange and again at the SHCIL AGM on 3rd September.  However, with the scam at SHCIL and its subsidiary being investigated by the Serious Frauds Investigation Office (SFIO) attached to the Ministry of Company Affairs as well as the CBI his former colleagues and fellow directors gave him the cold shoulder. At one meeting everybody shunned the row where he was seated and at another they offered limp and reluctant handshakes. 

S. Ramanathan

 

Saving demat costs

We have always said that high demat charges is one of the big deterrents to companies dematerialising their shares. SHCIL seems to confirm this view. At the AGM last week, a source overheard SHCIL officers saying that the shares continued to be held in physical form. Even though SHCIL is the largest Depository Participant in the Indian market, and a professional clearing member and Custodian to tens of thousand crore rupees worth of institutional shares, it apparently found it unaffordable to hold its shares in paperless form. It is believed that millions of  retail investors are also hanging on to paper shares.

 

R.K.Bansal exits

R.K.Bansal, who abruptly took over as Whole Time Director of SHCIL on 15 April 2007, at the direct intervention of the Prime Minister’s Office is set to exit just as abruptly, after a board meeting of SSL on Friday, 07 September 2007. As first reported on this website, the decision to bring R.C.Razdan to head SHCIL was taken on the eve of its AGM that was held at its Vikroli facility in Mumbai on 3 September 3007. There will be a week-long handover process after which Bansal will return to his parent organisation – IDBI Bank – on 12 September 2007. 

SHCIL continues to be investigated by the SFIO, CBI and probably by the Finance Ministry, however there is no sign that any of these organisations is serious about punishing or prosecuting those responsible for the scam at SHCIL and SSL, which would have gained humungous proportions if it had not been nipped in the bud before it could seriously compromise a nation-wide e-stamping initiative. In fact the KPMG forensic investigation report, has still to be submitted and as we have repeatedly said, every official who colluded with the scamsters remains well entrenched at SHCIL and SSL. Razdan, who comes from Delhi, either has the brief of hastening the investigation or of continuing to bury it.

 

By Sucheta Dalal
-- Sucheta Dalal



 



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