Malegam says primary market norms need to be tightened

Reacting to reports that the Malegam Committee in its first meeting was not in favour of granting discretionary powers to the Securities and Exchange Board of India to stop certain companies from entering the market, Malegam said: “No, I don’t think that is correct. We have only had preliminary discussions and no decision has been taken as yet.” In fact, he said: “Of course we have to tighten the norms, the only difficulty is that we have to define some kind of objective criteria on the basis of which SEBI can prevent a company from tapping public money.”

This paper spoke to Malegam in the context of the Tips Cassettes issue where one of the main promoters, Ramesh Taurani, has been charged with abetting the murder of T-Series promoter and music magnate Gulshan Kumar in 1997. In a written communication to this paper, SEBI had said that the issue of preventing a charge-sheeted promoter from tapping the market is under the consideration of the Malegam Committee.

In the Tips Cassettes case, whose public issue through the book building route opened for subscription on September 5, Ramesh Taurani had stepped down as director only in April 2000 when the company initially planned its public issue.

Ramesh Taurani, was first arrested in connection with the murder of music baron Gulshan Kumar on October 4, 1997. He was charged under sections 302, 307, 379 of the IPC — dealing with murder, atttempt to murder and conspiracy to murder, respectively — apart from some other offences. A case was filed by the crime branch (CR 71) the same year.

Gulshan Kumar, the then reining monarch of the audio cassette industry, was shot dead on August 12, 1997. The assailants believed to be members of the then Dubai-based gangster Abu Salem pumped 10 bullets into him.

The police in their charge-sheet claimed that Taurani, also a big player in the music industry, had paid Rs 25 lakh to Salem through music director Nadeem Saifi for killing Kumar. The police claim the conspiracy was hatched earlier in January.

According to police reports, the money was concealed in two cardboard boxes and collected from a manufacturing unit located at Laxmi Industrial Estate located on New Link Road at Andheri (east). The car was driven by one Silvaraj, the police claimed.

The police has said a call was made to Abu Salem from Taurani’s mobile phone after the killing and has produced the print out as evidence.

So far the police have named 19 accused in the charge-sheet. While 12 are in jail, seven are still at large. Taurani was in custody for 18 days during which time his bail was turned down by the sessions court and the Supreme Court. Ultimately he was released on bail on by the sessions court on October 23.

The police expect the trial to start in Mumbai any time now.