Click to play videoMumbai: The Security Exchange Board of India (SEBI) has ordered depositories NSDL and CDSL and eight other entities to repay Rs 116 crore that were allegedly received by them as illegitimate profits in an IPO manipulation case.
The order has raised eyebrows in the legal fraternity. Legal experts view SEBI's order arbitrary, as returning the alleged ill-gotten gains will also bring up the question of how SEBI will distribute this money among the investors. Meanwhile others have been questioning the validity of the order.
“To say that the intermediaries who are still under-proceedings are guilty and we will ask them to pay and that they are free to recover is a new jurisprudence. I think, that we are losing grounds here,” said Somashekhar Sundaresan of J Sagar Associates.
On the other hand, market watchers see the order as a victory for small investors. Some say the order does not accuse the intermediaries of fraud.
“SEBI clearly says recovering money after fraud is your lookout. SEBI is saying that you are not the fraudster but you were party to the fraud and therefore we hold you responsible,” Prithvi Haldea of Prime Database said.
Investor associations all over India have received the order enthusiastically. But it remains to be seen how effective it will prove to be.
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