Left parties plan to write to Chidambaram on IPO scam

New Delhi, April 28 | Updated: Apr 29 2006, 05:30am hrs
With Sebi taking strong action against various stock broking companies for alleged involvement in stock market irregularities, Left parties have received a shot in the arm in their tirade against the UPA government, particularly finance minister P Chidambaram.

They are now planning to write a letter to the finance minister and asking for an enquiry into the matter. Sources say that the strongly-worded letter by a senior Left MP will also draw the governments attention to the controversy and might blame it for soft peddling on stock brokerage firms, which allegedly misused share allotments.

Speaking to FE CPI(M) MP Chittabrata Majumdar said, We have always maintained that there is bungling in the stock markets and corrective measures need to be taken up. Similar sentiments were echoed by CPI leader in the Lok Sabha Gurudas Dasgupta who said, It should be an eye opener for the government, and frankly, this stock market phenomena is like a French casino to us, where there is consistent gambling. I have maintained that the economys growth cannot be judged by stock markets.

Commenting on the sharp fall witnessed by the sensex on Friday, Mr Dasgupta said, It is like a bubble, first inflates and then bursts. Nothing surprising to us. The Sebi order is a part of the investigation into the controversial IPO scam.

The scam came to light in 2005 when the private Yes Bank launched its IPO. Roopalben Panchal, a resident of Ahmedabad, had allegedly opened several fake demat accounts and subsequently raised finances on the shares allotted to her through Bharat Overseas Bank branches. The Sebi started a broad investigation into IPO allotments after it detected irregularities in the buying of shares of YES Banks IPO in 2005.