2003-05 IPO scam victims compensated
“I came to meet the finance minister, not for the token Rs 300 he gave me,” said Suman Parakh, a 48-year-old homemaker. “I had invested Rs 12,000 in the IPO of Yes Bank and if I had got an allotment I would have made Rs 20,000.”delhi Updated: Apr 13, 2010 00:23 IST
“I came to meet the finance minister, not for the token Rs 300 he gave me,” said Suman Parakh, a 48-year-old homemaker. “I had invested Rs 12,000 in the IPO of Yes Bank and if I had got an allotment I would have made Rs 20,000.”
“It’s not the money,” said Amit Jain, 34, who was also handed a cheque of Rs 300. “It’s the justice my father who passed away last November and on whose behalf I have come to collect the money.”
Parakh and Jain are among the first batch of 10 investors who have got back the money they notionally lost in the initial public offering (IPO) scam that occurred between 2003 and 2005. They were distributed out by Finance Minister Pranab Mukherjee on Monday.
All told, more than 1.2 million small investors, who had been denied allocation of shares in 21 IPOs — including Maruti Udyog, NTPC and Power Trading Corp — will be handed out a Rs 23.28 crore compensation for the opportunity they lost. That’s an average compensation of Rs 194 per investor.
“Given the strength of its infrastructure and a robust regulatory regime, the Indian securities market today is among the most attractive investment destinations in the world,” Mukherjee said at a function organised by the capital markets regulator Securities and Exchange Board of India.
The compensation amount is based on the recommendations of Wadhwa Committee report. The difference of closing price of shares on the first day of listing/trading on NSE and the IPO issue price is the basis of calculation for the purpose of payment.