BJP seeks white paper on IPO scam

The Bharatiya Janata Party (BJP) has demanded that action be taken against the guilty in the IPO-demat scam under which more than 50 million shares of small investors had been siphoned off through 53 public issues of 2004-05.

The party also demanded a white paper giving complete information about companies, scamsters, investors and bankers involved in the scam.

According to Kirit Somaiyya, head of the BJP investors cell, the scam allegedly began on August 16, 2004, when Roopalben Panchal of Sugandh Investment reportedly opened 10,669 bogus demat accounts.

Somaiyya said the Securities and Exchange Board of India, the Reserve Bank of India and the income tax department have accepted the enormity of the scam.

"These agencies have been unable to take action against the scamsters because of lack of directives from the finance ministry and lack of commitment and clarity among the regulators in the system," the BJP leader said.

Somaiyya expressed shock that instead of taking action against scamsters, and recovering hundreds of crores of rupees, the finance ministry was planning to scrap the small investors quota.

The BJP also opposed a move by the home ministry to regulate the lottery trade instead of banning it. According to BJP National Secretary Vijay Goel, the government has reportedly decided to do that under pressure from the All-India Lottery Traders Association.

"The government claims that the revenue earned out of lottery shall be spent on people's welfare, simply ignoring that it is mostly the middle income or lower income group that buy lottery tickets. No individual or state can prosper with the income earned out of gambling," he said.

Goel said the NDA government had introduced a law banning the single-digit lotteries and had also introduced a Bill to impose a ban on all types of multi-digit and other lotteries.

At that time all parties, he said had supported the government.

Today the UPA government headed by the congress is under the pressure of the lottery mafia for personal gains, the individuals earn more out of the lottery trade than the government," he said.