Stock Holding Corporation of India Ltd has withdrawn its petition with the Company Law Board seeking investigation in the affairs of its broking associate SHCIL Services Ltd. The move comes after the Department of Company Affairs ordered an enquiry by the Serious Frauds Investigation Office earlier this month.
The SHCIL petition was filed in May 2007 seeking investigation in the affairs of its associate SHCIL Services Ltd. The application followed a change of management at SHCIL and the new management complained that SHCIL’s control over its associate SHCIL Services was diluted through fraudulent stock allotments to other private shareholders.
IDBI’s RK Bansal was sent to head SHCIL after the then Chairman and Managing Director R Jayaraman Iyer was asked to go on leave and later removed and repatriated to IDBI. Bansal told Hindustan Times, “After the government ordered the Serious Frauds Office to investigate our petition, we withdrew it.”
Bansal said the serious frauds investigation was ordered in the second week of August under section 235 of the Company’s Act while the SHCIL petition was under Section 237. “The two have similar provisions,” he added.
“Now that we have bought over Unitec, the Singapore-based subsidiary of SHCIL Services that had the technology for the e-stamping project, SHCIL Services is of little significance to us and therefore the importance of the CLB petition, too, is less.”