Bankers say they were not informed about LIC’s rapid $3.3 billion deal

The Story in Brief

Officials in the state divestment department kept the launch date of a government share sale secret, according to people familiar with the matter. The date was not disclosed to market participants so that traders could not take positions in the stock ahead of the sale.

Those familiar with the matter said the stated purpose of the secrecy was to prevent traders from pushing the share price lower before the government could sell its shares. The careful timing and withholding of the launch date were presented as measures to avoid market movements that might affect the outcome of the disposal.

The Indian Opinion

Secrecy around the timing of a share sale can invite competing interpretations. Some readers may see nondisclosure as routine market protection intended to prevent front-running and preserve the value of a government sale; others might read it as opaque or disadvantageous to certain market participants. Given the limited facts available – a single account attributing the decision to officials and noting the aim of preventing traders from moving the price – it is not possible to determine whether the measure was proportionate or necessary. Reporting and commentary should acknowledge that uncertainty rather than presume impropriety.

Original article: Bankers Kept In Dark On LIC’s Unusually Fast $3.3 Billion Deal (www.ndtvprofit.com)

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