Sebi to probe ONGC share muddle

Probe to determine as to who should bear the consequent losses of the impasse.

The Securities and Exchange Board of India (Sebi) will probe the issue of overallotment of shares to retail investors in the Oil and Natural Gas Corporation's (ONGC's) public offer, to determine who will bear the losses due to the impasse.

"If there has been a deliberate mistake, responsibility will be fixed. No one will be able to escape under the cover of collective responsibility," Disinvestment Minister Arun Shourie told reporters here.

This is in contrast to Disinvestment Secretary Dhirendra Singh's statement earlier in the day that the entire issue was a team effort. Singh had also said there were enough shares in escrow to take care of a contingency.

He added that 52 high net worth individuals were overallotted 300,000 ONGC shares following the public offer, of which only 12 had volunteered to surrender the excess allotment. He said it was for Sebi to probe and decide on the overallotment of 100,000 shares to the remaining 40 retail investors, he said.

Shourie said ONGC was setting up a helpline where investors could lodge their grievances relating to any mismatch in allotment of shares and what was being credited to them.

Indicating that no issue would be raised if the overallotment was due to an error, Shourie said it was for Sebi to find out whether the registrar or lead manager was responsible for the goof-up and if it was a culpable mistake.

The minister said the investors' appeal that they did not know about the overallotment did not stand. "Everyone knew the basis for entitlement. It was in the Press and merchant bankers knew it," he said, adding that, "Large investors are usually well informed."

Pointing out that the issue of overallotment had been resolved, Shourie said the public offer for the sale of a 10 per cent stake in ONGC had been completed and the Rs 10,542 crore proceeds from it had been deposited in the government account earlier in the day. He said the issue was unlikely to face litigation.

The trouble started on Monday when the registrar overallotted ONGC's shares mainly to high net worth investors, leading to freezing of depository transfers of these shares by National Securities Depository Ltd.

The allotment row

* 52 high net worth individuals have been overallotted 300,000 ONGC shares.

* 12 have volunteered to surrender the excess allotment.

* Sebi to decide on the overallotment of 100,000 shares to the remaining 40 retail investors.

* The ONGC public offer has mopped up Rs 10,542 crore.