SHCIL is India’s largest depository company and acts as custodian to the capital market transactions of all of India’s top public sector financial institutions, insurance companies and nationalised banks. On April 25, the board of directors of Stock Holding Corporation of India (SHCIL) met for the first time in Mumbai after R K Bansal, a senior official of IDBI Bank had taken charge of management as whole time director. SHCIL’s chairman and managing director (CMD) R Jayaraman Iyer was sent on compulsory leave approximately 10 days earlier.

The board was meeting to assess the implications of the many dubious activities of SHCIL’s CMD, but it cannot possibly have been unconscious of its own failure in fulfilling its fiduciary responsibility as shareholders of the company. The majority of SHCIL’s shareholding is owned by IDBI Bank, IFCI, S-UTI, GIC, New India Assurance, Oriental Insurance, National Insurance, United India Insurance and ICICI Bank. These shareholders have been woken up by reports in The Indian Express and from government agencies that SHCIL Services Ltd (SSL), once a 100 per cent subsidiary had, without their knowledge, slipped out of their control. Worse, SHCIL itself could have gone that way too.

Yet, the board meeting of April 25, ultimately turned out to be a damp squib. Although institutional shareholders seemed alarmed at SHCIL’s activities, their actual decisions were rather ineffectual. It is probably this casual attitude that allowed SHCIL to be run like a private fiefdom in the first place — that too despite its involvement in the Scam of 2000.

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