The “Rakesh Jhunjhunwala Surana Solar Scam” is a scam that isn’t. Instead, it has to be called a brilliant scheme for pulling the wool over investors’ eyes and taking home the loot.
The scheme is so childishly simple that one wonders why nobody thought of it before.
One “Rakesh Jhunjhunwala” bought a truckload of stock of a little-known small cap called “Surana Solar”. Everyone assumed that the “Rakesh Jhunjhunwala” is none other than the revered Badshah of Dalal Street. The news spread like wildfire and within no time the punters descended on the stock determined to cash in on the euphoria.
When the stock price surged and breached the upper circuit, the “Rakesh Jhunjhunwala” dumped his holdings of the stock, leaving the punters high and dry. The stock crashed like a ton of bricks and the punters suffered heavy losses.
SEBI acted with remarkable alacrity and directed the stock exchanges to withhold payouts of the transactions that happened on those fateful days of June 10 and 11 till it investigated the matter.
This gave the punters hope that SEBI would declare the transactions a fraud and nullify all transactions.
However, today, SEBI sent a terse message directing the stock exchanges to release the payouts.
This effectively means that SEBI has not found any evidence of wrong-doings by the “Rakesh Jhunjhunwala” who implemented the scheme.
It is not a surprising outcome because anyone effecting such a brilliant scheme would have ensured that there is in fact a real life “Rakesh Jhunjhunwala” who can stand up and look the authorities in the eye when they come calling.
Dhaval Dave, the CEO of Rajkot-based Sun Flower Broking, which had opened the demat account for the Kolkata-based duplicate, had confidently said: “Everything is regular. Proper KYC (know your customer) was done and the PAN card was verified.”
Dhaval Dave also asserted that the Jhunjhunwala name did not raise suspicion on the basis that: “Naam toh kisi ka bhi ho sakta na (anyone can have the same name).”
Hopefully the punters will have learnt the bitter lesson of life: Look before you leap!
If there is anyone responsible for this fiasco its the media channels and news papers who irresponsibly kept flashing that Rakesh Jhunjhunwala has bought so and so share without verifying anything.
Rakesh is a common name and Jhunjhunwala is a common sirname and anyone can have the name Rakesh Jhunjhunwala. If the media guys and the punters thought its ”the” Rakesh Jhunjhunwala its their mistake. A very good lesson for punters. Do not follow anyone blindly.
Media report that rakesh jhunjhunwala bot shares was correct. Its buyers responsibility to be aware & use reasoning. Bulk deal is available on nse website, no need of media to find bulk deal
Good move by SEBI. Idiots should never get bailed out. RJ himself says that not to follow him blindly. And these idiots followed media reports when Indian media itself don’t have any ethics or integrity
Sorry guys.
Just because pay-out is released, that doesn’t mean it’s a “clean-chit” by SEBI.
Please read the link –
http://wap.business-standard.com/article/companies/exchanges-release-withheld-payment-in-surana-solar-trades-115062600871_1.html
An exchange official is quoted as follows-
“Sebi is still investigating the matter but they have asked to release the payments to the members,”.