Opee Scam a Deft Judgement

Zero tolerance towards market manipulators will revive confidence in the securities market.

The apex court of India has delivered a verdict insulating the position of retail investors in the market, while unveiling yet another scam. Penalising Opee Stock-Link (Opee) in a matter concerning cornering of shares earmarked for the ‘retail category’ in initial public offerings (IPOs), the Supreme Court has held that the company was guilty of using benami/fictitious demat accounts to procure shares in a fraudulent and unfair manner.

The history of the case dates to SEBI passing a disgorgement order which held that in the Jet Airways IPO, 553 account holders who were allotted shares under the ‘retail individual investor’ category were mere name lenders who transferred the shares to Opee under a pre-designed manipulative scheme meant to deprive allotment of shares to genuine retail investors. Thereafter, Opee sold such ‘cornered shares’ at a price higher than the purchase price, bringing in windfall gains.