SHCIL starts setting house in order

The Stock Holding Corporation of India (SHCIL), India's biggest share custodian, has begun the process to set its house in order, after a series of allegations of misappropriations in the last few months, and subsequent probe by the Registrar of Companies (RoC), damaged its reputation.

Consultancy firm KPMG, which was entrusted with the `fact finding mission' to take stock of the things that had gone bad with the company, has submitted its preliminary report to SHCIL, said R K Bansal, whole time director of SHCIL.

Bansal took charge after Jayraman Iyer, the former CMD, was asked to go on leave, following the charges against the previous management under Iyer including the formation of various subsidiaries and selling equity stakes in them to some individuals without properly briefing the board on such steps.

One of the first steps taken by Bansal was to make the controversial firm Unitec Value Solution as the fully-owned subsidiary of SHCIL. This company was floated as a subsidiary of SHCIL Services for handling the e-stamping project, which was awarded to the parent SHCIL.

The technology for the e-stamping project, provided by Singapore's Crimson Logic, was routed through this company.

Bansal said the entire board of SHCIL was reconstituted. Some of the new members of the board are N Balasubramanium (chairman of SIDBI), G M Ramamurthy (an independent director), C B Antony (IDBI representative), Anup Bagchi (ICICI representative) and Sanjeev Ghai (IFCI representative).

KPMG, he said, was undertaking a detailed study to fix responsibility and suggest the way forward for SHCIL.

"The final report will be submitted soon," Bansal said. The company will undertake steps, as suggested by KPMG, after discussing the report with authorities concerned including the Finance Ministry and Ministry of Corporate Affairs, officials said.

SHCIL, formed in 1986, is India's first custodial services company and it is now into depository services, broking and derivatives, distribution of third party financial products such as mutual funds and IPO applications etc.