In an affidavit, Anant Barua, division chief of the legal department of SEBI, said that investigations against Mehta is still in progress and any disclosure at this stage would be detrimental to the investors and public interest. Of the 18 suspended brokers, three brokers - R R Bohra, Harvest Deal Securities of BSE vice president Rajendra Banthia and Mahico Securities - got a stay from the court on SEBI's directive till Friday.

The SEBI has also admitted that the an enquiry is currently on against Banthia for alleged price rigging in the Nedungadi Bank scrip. SEBI saidthat the argument of the aggrieved brokers that they were not given an opportunity to be heard after the show cause notice was served was misconceived. The order was interim and passed in public interest for the safety of investors and that brokers would certainly be heard, SEBI assured the court.

Urging for dismissal of the brokers' petition, SEBI said if brokers, who were heard by an enquiry officer, are still aggrieved with its decision, they can file an appeal before the Union government under Section 20 of SEBI Act. Moreover, SEBI said the aggrieved brokers were only directed not to conduct fresh business and that deactivating of terminals was a common practice undertaken by SEBI in such cases. SEBI denied that it had directed these brokers to close down business and said they were free to act as members of the stock exchange.

SEBI said, investigations revealed that Bohra had dealt through Malar Share Shoppe despite knowing that the latter was dealing for a group clients who were acting as a frontfor Harshad Mehta. Besides, Bohra is a close relative of the sub-broker and has exchanged kaplis/cheques from or through other brokers of BSE and NSE on account of Malar Share Shoppe. During the payment crisis on the BSE, Bohra took up the liability on behalf of Malar Share Shoppe. Hence, proceedings were initiated against Bohra and others under Regulation 28 of SEBI rules.

SEBI said investigations had revealed that a set of common clients with whom a group of brokers were dealing in these three scrips were the entities closely connected to Harshad Mehta and acted as front for him. The directors of the common client companies - Anil Doshi and Dinesh Doshi - were close relations of the big bull. They had no financial track record to undertake such transactions.