What Happened On May 17, 2004? ; Investigations Into the Sensex Crash On Black Monday of May Last Year Reveals a Bigger Lacuna in the Indian Stock Market
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Summary
The prospects of a Left-supported government was greeted by the Sensex crashing 842 points on May 17, 2004-the worst stock market collapse in history. If the fall didn't acquire the shape of a scandal it was not only because markets recovered soon but also because the plunge was thought to have been caused by two obvious reasons: The rather unexpected defeat of the NDA and a meltdown of stock markets in emerging markets in mid-May. But the Finance Ministry, and so market regulator SEBI, never thought that to be the complete explanation. A hunt was launched to find out if there was foul play: a deliberate attempt to create selling pressure and bring down share prices.
A year later, SEBI has dug up early evidence that could uncover a major scandal, the implications of which will go beyond the events of May 2004. On May 17 this year, SEBI took action against foreign institutional investor (FII) UBS, one of the largest sellers of shares in May 2004. UBS had carried out large-scale selling orders on behalf of unidentified clients, many of whom SEBI suspects could be Indians.See the full content of this document
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What Happened On May 17, 2004? ; Investigations Into the Sensex Crash On Black Monday of May Last Year Reveals a Bigger Lacuna in the Indian Stock Market
These clients transacted in Indian stocks through UBS, but hid behind a maze of investment deals extending all the way from India to Mauritius, London, British Virgin Islands, the US and back to India. What happened last year, SEBI suspects, is a ...
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