Sucheta Dalal :SSL's DP registration cancelled?
Sucheta Dalal

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SSL's DP registration cancelled?  

Jun 22, 2007

CDSL cancels SSL’s DP registration

In a surprise move, we learn that the Central Depository Services Ltd (CDSL), an affiliated of the Bombay Stock Exchange (BSE) has finally moved to revoke the registration of SHCIL Services Ltd (SSL) the controversial, former subsidiary of Stock Holding Corporation of India Ltd (SHCIL). While there is no official confirmation, reliable sources say that the action has been taken ahead of the SSL board meeting tomorrow.

Interestingly, SSL’s registration as DP has to be approved by the Securities and Exchange Board of India (SEBI) and we learn that it was granted in double-quick time without the regulator bothering to examine the fact that the subsidiary would then become a direct competitor of the parent – SHCIL. Furthermore, neither the regulator nor CDSL appear to have made any attempt to investigate the real shareholding of SSL, which had continued to posture as a subsidiary of SHCIL even though its parent company’s stake had been fraudulently reduced to a mere 24%.


BSE began SSL audit on 18 June 2007

Meanwhile, the Bombay Stock Exchange, which is a first line regulator for SSL's sub-broking activities is understood to have woken up and ordered an audit of SHCIL Services. It began in a low key manner on 18 June 2007.


SHCIL cancels EGM

The Stock Holding Corporation of India Ltd (SHCIL) has quietly cancelled the Extraordinary General Body Meeting scheduled after the three directors who were to be removed, quit on their own. These are R.Jayarman Iyer, former CEO of SHCIL, AT Pannir Selvam (former Chairman, Union Bank of India) and T Naramsimha Rao, an independent director. Since the primary purpose of the meeting had been served, SHCIL issued a quiet advertisement in the Free Press Journal and cancelled the meeting.



KPMG Fraud Unit Interviews Key Officials

Meanwhile, KPMG’s fraud detection unit, which is investigating the matter, has been interviewing all SHCIL officials and consultants who were connected with the e-stamping project and the setting up of the many subsidiaries with the pre-fix SHCIL (SHCIL Projects, SCHIL Hannobe etc) including outside consultants who helped seal the deal with Crimson Logic Pte of Singapore.


-- Sucheta Dalal