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August 28, 2001
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Money > Business Headlines > Report August 28, 2001 |
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JPC member asks RBI, Sebi to probe Tata Finance issueRakesh P Sharma S S Ahluwalia, a member of the joint parliamentary committee probing the current stock market crisis, has urged the Reserve Bank governor Bimal Jalan and the Securities Exchange Board of India chief D R Mehta to look into affairs of Tata Finance. The non-banking finance company hit the headlines when the Tatas filed an FIR against the company's former managing director and five of its executives alleging criminal breach of trust and forgery. The controversy thickened when J E Talaulicar -- a director of Tata Finance and chairman of its erstwhile subsidiary Niskalp Investment & Trading Company-- stepped down as Niskalp chief. He had allegedly sold 100,000 shares of Tata Finance on March 30, 2001, at Rs 69 (against then market price of Rs 35) by back-dating the contract. In his letter to Jalan, Ahluwalia said: "This smacks manipulations and insider trading and is indicative of the dimensions of involvement of large corporate in circumventing the laws and rules. I would, therefore, urge upon you to have the affairs of TFL and its subsidiaries investigated into in order that its manipulative practices, breaches RBI rules and regulations and unauthorised deployment of funds may be unearthed and duly brought to book." Tata Finance in its letter to RBI on July 25 asked for relief for achieving required prudential norms including capital adequacy ratio of nine per cent, lending limits to the subsidiary companies and high debt-equity ratio. Tata group sources, however, pointed out that as on June 30, 2001, TFL had maintained the required capital adequacy ratio and the Tatas are in constant dialogue with the RBI seeking the central bank's support and cooperation in brining the matter back to normalcy as quickly as possible. The group has also reiterated that it will be standing behind Tata Finance Ltd and it will take the full responsibility to meet all its obligations. Powered by YOU MAY ALSO WANT TO READ:
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