| Stung by the lukewarm response to the public issue of IBP, Disinvestment Minister Arun Shourie raised the bogey of a bear cartel and said the government had identified the people responsible for pulling down the prices of these stocks. |
| The minister said some people had played the market in anticipation of the government announcing a 5-10 per cent discount on the last closing price of these stocks while setting their floor price. |
| He was speaking to reporters after a hurriedly convened meeting with financial advisers and officials of the Securities and Exchange Board of India (Sebi) here yesterday. |
| Shourie, who later met Prime Minister Atal Bihari Vajpayee and Finance Minister Jaswant Singh to apprise them of the situation, said he had informed the financial advisers for the six issues "" IBP, IPCL, Dredging Corporation, CMC, Gail and ONGC "" about these people. Denying that there would be any "immediate action against these elements", Shourie put the responsibility on the advisers, saying, "The advisers are our partners in this and it is their job to motivate and inform the investors." |
| Immediately after Shourie's outbursts, the government sprang into action. |
| Senior officials of the finance ministry, who held a series of meetings with fund managers and market analysts throughout the day, said it was for the disinvestment ministry to initiate necessary action. |
| The high-level committee on capital markets, headed by Reserve Bank of India Governor Y V Reddy, is meeting in Mumbai tomorrow. The committee, which includes Union Finance Secretary D C Gupta and Sebi Chairman G N Bajpai, will discuss the current situation in the stockmarket. |
| Sebi has sought data on the trading pattern in stocks like IBP and IPCL to see if their prices have been hammered. |
| "The regulator has been closely watching the stock movement and seeks information when prices move up and down," a Sebi source said. |
| "We assume that the small investor is doing something and we try to discover his motives, but he is not doing anything. Only a few persons are trying to pull the market down," Shourie said. |
| Asked if he knew the persons behind these developments, the minister said, "Hum bekhabar to hain par itne bhi nahin." He added that there was a pattern in the current behaviour of the stockmarket. |
| "Why did the market dip on February 19? Was it during the last hour of the trading? There are too many theories," he said. |
| Commenting on the behaviour of the market, especially in the last few days, Shourie said, "There is a great story to be done. A book can be written on the character of the Indian market." |
| The minister is, however, confident that the government will mop up the targeted Rs 14,500 crore from the six issues in the current fiscal. The government would not go for distress sale of shares in any of these companies, he said. |
The meltdown
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| DAY 2/ Feb 20, '04 IPCL offer opens, subscribed two times on first day. Gail, Dredging Corporation roadshows begin |
| DAY 3/ Feb 23, '04 Govt announces Rs 620 floor price for IBP, Rs 475 per share for CMC. ONGC kicks off roadshows. CMC, IBP offers open. CMC offer oversubscribed 1.93 times, IBP gets dull response |
| DAY 4/ Feb 24, '04 Sebi considers changing allotment norms to check post-issue volatility |
| DAY 5/ Feb 25, '04 Shourie says bear cartel responsible for the fall in PSU share prices, asks financial advisers to motivate investors |
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