SHCIL vs SSL

: Stock Holding Corporation of India Ltd (SHCIL) has now petitioned the Company Law Board (CLB) seeking an investigation into SHCIL Services Ltd (SSL) — once its wholly owned subsidiary. In the last several weeks, we have exposed how SSL was virtually filched by SHCIL’s own chairman, right under the nose of the board of directors. The CLB petition, under section 237(b) of the Companies Act, explains how SHCIL’s shareholding was diluted through “clandestine and fraudulent” allotment of shares to outsiders. The actions are especially brazen because public financial institutions, banks and insurance companies hold 75 per cent of SHCIL, India’s largest custodian company. The petition before the CLB names R Jayaraman Iyer, its former chairman and managing director (CMD) who has been sent on compulsory leave, and S Ramanathan, SSL’s CEO, as the main respondents. The Singapore-based foreign shareholders have also been named in the petition, which outlines for the first time the dubious manner in which SSL’s shareholding was alienated.

Introducing Nilanchal

The dilution of SHCIL’s shareholding in SSL began by allowing a private company called Nilanchal Capital to infuse Rs 15 lakh into the company. The shares allotted to Nilanchal were subsequently transferred to several individuals. This was done under the false pretext that the National Stock Exchange (NSE) required 51 per cent of the shareholding to be held by individuals when, in fact, SSL is a broker on the Bombay Stock Exchange (BSE), which has no such rule. Jayaraman and Ramanathan, through systematic “abuse of power”, used the foreign direct investment (FDI) route to allot shares to Singapore-based entities in a “clandestine and surreptitious” manner. This marginalised SHCIL’s control, but it wasn’t evident because there was no overt change in management. The petition raises some doubts about the antecedents of foreign shareholders who were “fraudulently” allotted shares — we reported this several weeks ago. SSL also acquired Unitec Value Solutions Pte, a Singapore-based company which is “being clandestinely used as a conduit for fraudulent activities”. We had earlier reported that a Singapore-based entity called E-ventures Capital Pte holds a substantial 33 per cent stake in SSL; the petition provides additional information and says that E-ventures also holds 18,86,250, 7 per cent non-cumulative convertible preference shares in SSL. Together this will give it virtual control over SSL. Interestingly, some Government investigation agencies already have evidence about the suspect background of E-ventures.

Message*	Maximum characters allowed

Name*		Email ID*
Subject*		Country*

TERMS OF USE:
The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).

I agree to the terms of use.