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July 28, 2001
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Money > Business Headlines > Report July 28, 2001 |
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OCBs may be treated on par with FIIsBS Markets Bureau After a gap of nearly two decades, the norms for overseas corporate bodies are likely to be changed. The OCBs, set up by non-resident Indians and operating in the stock markets, are likely to be subjected to the minimum net worth norms. Besides, the OCBs are likely to be treated at par with foreign institutional investors as far as their stock market operations are concerned. The norms regarding OCBs, which came into force in 1982, have never been revised. OCBs are not required to register either with the Securities and Exchange Board of India or the Reserve Bank of India. However, while repatriating money overseas, they are subjected to Fema regulations. OCBs and FII sub-accounts have allegedly played major roles in the recent stock market scam. Sebi has noted before the JPC probing the Ketan Parekh scam that these OCBs- with a small capital base- had made significant transactions in the stocks associated with Ketan Parekh. The pattern of investments/trading transactions, the timing and the interconnections point towards prima facie misuse OCB and FII sub-account routes, including market manipulation in the form of circular trading, parking of shares, structured transactions, concentration of holdings, etc. The OCB route also provides channels for the repatriation of profits based on manipulated prices and possible siphoning of money out of India. OCBs which have come under the microscope of the JPC probing the stock scam are Brentfield Holdings Ltd, Wakefield Holdings Ltd, Kesington Investments, European Investments Ltd, Far-East Investment Corp Ltd, Delgrada Ltd, Almel Investments (Mauritius) Ltd, Symphony Holdings, Greenfield Investments Ltd, AOM Investments Ltd and Dossier Stock Inc. These OCBs are being looked into for indulging in large transactions in the K-10 stocks linked to Ketan Parekh. The RBI has called for information from commercial banks through which the OCBs have reportedly routed the money. It is in the process of looking into the inflow and outflow of funds through the OCB transactions. Powered by YOU MAY ALSO WANT TO READ:
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