In a bid to discourage 'fraudulent siphoning' or diversion of funds in corporate sector, the government and capital market regulator has decided to scrutinize money raised through initial public offers (IPOs) during the period between 2004 and 2007.

The ministry of corporate affairs and SEBI would start investigations to find possible IPO frauds and strict actions would be taken against the guilty. However, an official source said that government has no intention to engage in which hunt and measures being taken are just precautionary. He added, "The intention is not to hound the corporate sector, but to ensure that the funds raised are being used for purposes stated. The idea is to identify 'fraudulent diversion of funds' and to bring the guilty to book."

It is to be noted here that about Rs 45,000 crore were raised in 2007, the period during which stock market was at its peak level. Shares of leading companies including Reliance Petroleum, TCS, Patni Computers, Biocon, NDTV, IndiaBulls, Jet Airways, Suzlon, Reliance Communication, Sun TV and DLF were touching their peaks at that time which are now reduced to less than half of their value.

However, a market analyst declined the possibility of fraud and hold responsible to global slowdown for significant fall in share prices.