Forex Scam: Banks Face Sebi Scrutiny for Disclosure Lapses
Mumbai: As a multi-agency probe continues in the alleged forex-based black money case involving thousands of crores of rupees, the Securities and Exchange Board of India (Sebi) and stock exchanges have now begun a scrutiny of several banks for any violation of the disclosure norms for listed firms.
State-run Bank of Baroda and Oriental Bank of Commerce are among those facing the scrutiny, while stock exchanges have also sought clarifications from top private sector lenders HDFC Bank and Axis Bank.
A senior official said Sebi will take a decision on a formal probe after scrutiny of their replies to the notices issued by the stock exchanges, but prima facie the market regulator is of the view that the disclosure norms required banks to inform the shareholders as and when they came to know about the alleged lapses on part of some staff members.
On the other hand, banks are of the view that they did not make the disclosure to the stock exchanges as the financial losses appeared to be ‘nil or insignificant’ at that point of time and the public disclosure of those cases could have adversely impacted the outcome of international probes.
The matter relates to alleged illegal money transfers over several years to Hong Kong and possibly other foreign locations, which were passed off as payments for non-existent imports, that came to light only this month.
Separately, foreign exchange worth Rs 550 crore was remitted through 11 entities to Hong Kong on account of making import payments from a Ghaziabad branch of Oriental Bank of Commerce during 2006-10.
The cases are being probed by the Central Bureau of Investigation (CBI), the ED, the Income Tax Department and the Serious Fraud Investigation Office (SFIO), among other agencies.
As most of the banks whose names have come up are listed entities, Sebi has asked the stock exchanges to seek clarifications from them and has also begun an internal scrutiny of the matter.
Among others, Axis Bank was yet to respond to the notice from the stock exchanges, while HDFC Bank said in its reply that the matter was being examined internally on top priority basis and it was extending full cooperation and support to the authorities in their investigations.
Oriental Bank of Commerce said a suspicious transaction report was sent to the Financial Intelligence Unit (FIU) by the bank and a police complaint was also filed.
However, most of the banks are yet to reply to direct queries on why these matters were not disclosed on the stock exchange platform for the benefit of investors, as required under the listing norms.
Also, as the probes by the bank’s internal audit division and by the investigative agencies were in progress, it was thought it would be proper to wait for the final outcome of the investigation, the bank said in its reply to clarifications sought by the surveillance and supervision department of the BSE.
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Source:Ndtv
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