Action begins

: The Government of India has ordered a detailed probe into the goings-on at Stock Holding Corporation of India Ltd (SHCIL) that have been detailed in these columns over the last six weeks. IDBI Bank (which owns over 16 per cent of the shares) has been asked to lead the investigation and on Friday night, the chief general manager, R K Bansal, was asked to take charge at SHCIL as the interim head and also told to back up its Information Technology (IT) system and ensure that no data and information is tampered with. SHCIL’s chairman and managing director Jayaraman Iyer has been asked to go on leave. We learn that two more directors are being appointed over the weekend to conduct a detailed investigation into SHCIL’s operations, its subsidiaries and its e-Stamping contract. Meanwhile, ICICI Bank, another 16 per cent shareholder of SHCIL had already sent out a notice requisitioning a board meeting to discuss revelations by this newspaper. The board meeting, which is to be held on 25th April is expected to go into the dilution of 76 per cent of the shares of SHCIL Services Ltd (licensed as a broker of the Bombay Stock Exchange) to individuals and foreigners and the setting up of four subsidiaries with the prefix SHCIL — all with unconnected entities and individuals as substantial shareholders. All these companies were set up in under a year. The board will also investigate the structure of SHCIL’s contract as the Central Record Keeping agency for the e-stamping project.

Tall claims

The crux of the shenanigans at SHCIL over the last few months is the lucrative picking expected from Central Record Keeping for the e-stamping project in collaboration with Crimson Logic Pte Ltd of Singapore. Some numbers explain why this is such a juicy contract. The total stamp duty collected by all the states during 2004-05 has been estimated at Rs 17,644 crore, of which five states, viz Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu and Andhra Pradesh, accounted for a total collection of Rs10,201 crore, ie almost 60 per cent of the total duty. Maharashtra is reported to have collected Rs 3,375 crore, Uttar Pradesh Rs 2,564 crore, Karnataka Rs 1,600 crore, Tamil Nadu Rs 1,350 crore and Andhra Pradesh Rs 1,312 crore. The maximum stamp duty in the country is collected from Mumbai, which is considered the financial capital. The SHCIL management has quietly worked to ensure...

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