This deliberate and confusing mix of identities between SHCIL the parent and SSL the alienated subsidiary was perpetuated by getting SHCIL to turn into a sub-broker of SSL. The KPMG team ought to unravel the loss caused by an unfair revenue-sharing arrangement between SSL and SHCIL. In many cities, the two have offices next to each other; yet the charges are widely different. Interestingly, the Securities and Exchange Board of India (Sebi) has also made no attempt to inspect this convoluted arrangement or understand its implications.

In the six months before the management change of April 15, SCHIL under Jayaraman Iyer had set up four entities which all carried the prefix SHCIL but were joint ventures with private entities. We learn that some of the equipment purchased for the Disaster Recovery Site (DRS) for the e-stamping operation may have found its way to these companies. That would be another job for KPMG, including finding out who paid for the properties occupied by companies that use the SHCIL name and their true ownership. It will also have to find out why the DRS was shifted from Bangalore, which is India’s IT capital, to the Technopark at Thiruvananthapuram where SHCIL Hannobe is located.

We learn from the SHCIL management that SHCIL Hannobe has been asked to remove the prefix and vacate the SHCIL office after completion of a documentation contract assigned to the company by the earlier management. SHCIL apparently has no stake in the company. Interestingly, in an email to this writer last week, Boney Shek of SHCIL Hannobe had claimed that SHCIL Projects, another subsidiary floated by SHCIL, was keen on investing in his company.

... contd.