In an unprecedented move, Sebi, on the direction of the SC, has revived an order that was in the past dismissed as "null and void" by the market regulator, but under a different chairman. Sebi said on Thursday that an order by a two-member committee, which found serious lapses and irregularities on the part of National Securities Depository (NSDL) in the IPO scam of 2003-2006, will now be implemented.

"Pursuant to the order dated May 9, 2011 of the Supreme Court, the board decided to release the orders of the two-member committee in the matter of IPO irregularities and DSQ Software to NSDL for compliance," Sebi chairman U K Sinha said.

The order by G Mohan Gopal and V Leeladhar, two former independent members of Sebi board, had found NSDL negligent in carrying out its duties. The committee had ordered NSDL to conduct an enquiry and fix individual responsibilities for its failure to contain the IPO fraud. It was found that the depository did not follow best practices to detect opening of thousands of fictitious accounts in the name of retail investors for share allotment in IPOs between 2003 and 2006, which were used to make huge illegal profits by a handful of people.

The IPO scam had taken place when CB Bhave was the chairman of NSDL. But after Bhave took over as the Sebi chairman in February 2008, Sebi had declared the findings of the Mohan Gopal-Leeladhar committee as "null and void" on the ground that it had breached its mandate in making these charges.

Sinha said that regulator would ask NSDL to comply with the findings of the report, but did not divulge further details.

Besides, Sebi had also previously dropped its proceedings against NSDL in the DSQ Software share allotment case, where the depository was accused of lapses in dematerialising 1.30 crore shares of DSQ Software, which were later sold into the market without listing.  (Times of India)