Sebi has issued a consent order, accepting HDFC Bank’s application to settle the case filed against it in the IPO scam. It has paid Rs 1 lakh as part of the consent procedure. The Sebi order says that it had launched an investigation into share dealings in shares issued through IPOs during 2003-05.
This was the time when it was discovered that people had opened multiple accounts giving false names and addresses, where the beneficiary was the same. Sebi had come down heavily on all market intermediaries, who were found negligent. Sebi’s investigation found that HDFC Bank had also opened several such demat accounts and violated various provisions of
Sebi’s regulations and guidelines governing market intermediaries. Sebi had passed an initial order in April 2006 prohibiting HDFC Bank from opening new demat accounts, which was revoked in November 2006 after hearings. It had also started enquiry proceedings and a show cause notice was issued on November 22, 2006. HDFC Bank filed for a settlement of the case on July 18, 2008. The High Powered Advisory Committee, which decides on settlement of cases, recommended it for settlement. The consent order came into effect on December 22.