Unregulated overseas corporate bodies play havoc
Mumbai: With both the Reserve Bank of India and the Securities and Exchange Board of India not owning responsibility for overseas corporate bodies, these entities have been left to operate with impunity, including playing the markets and investing and pulling out money at will. It has been found that a large number of transactions carried out by the overseas corporate bodies involved the Ketan Parekh group, including investments made in the 'K10 stocks', yet their activities are not regulated. Since the only requirement for an overseas corporate body being a 60 per cent stake held by non-resident Indians or people of Indian origin, and there is no cap on the minimum paid up capital, there have been many companies with as little capital as 10 dollars taking enormous positions in the Indian stock market without any hindrance.

An example is that of Mauritius based European Investment and Far East Investment, both of which function out of the same address in Port Louis, Mauritius, have a paid up capital of 10 dollars each, but have managed to put in about Rs 355 crores in the Indian stock market and remit out Rs 361 crores between January 2000 and March 2001. Another is that of the Wakefield Holdings, also based in Mauritius, which had inflows of Rs 234 crore and outflows of Rs 2,229 crore and whose paid up capital is a mere 5,500 dollars.
Sebi has now asked the Enforcement Directorate and the Central Bureau of Investigation to have a look-in.
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Modi Rubber open offer further extended
New Delhi: The Modi Rubber open offer has been extended till July 23. The Modi's claim to have already mopped up 12 per cent, and are confident of obtaining the 44 per cent from financial institutions, and expect to cross the 70 per cent mark before the offer closes.

The open offer for acquiring 35 per cent additional stake in MRL was launched together by brothers B K Modi and V K Modi at Rs 90 per share.

Financial institutions too succeeded in extracting a Rs 45 crore bank guarantee by the Modis towards buying their 44 per cent stake in Modi Rubber, three Malabar Hills' flats and an assurance that their stake will not be sold to a "third party".
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Sebi says MK Modi stays barred in MRL offer
Mumbai: The Securities & Exchange Board of India has upheld its order barring M K Modi, a major shareholder in Modi Rubber, from participating in MRL's open offer.

Sebi, in its order, said Modi was part of the promoters' group, and a person "acting in consort", and, hence, could not participate in the offer. Sebi had conducted a hearing in this case last week after Modi had challenged Sebi's previous order barring him from participating in the offer, in the Mumbai High Court.

According to Sebi, if the promoters themselves start tendering their shares, then the 20 per cent limit would be exhausted and public shareholders would not be able to exercise their prerogative.
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