Although no official comment could be elicited from the brokerage house, highly placed sources at the BSE explained that while the deal at the ITC counter gave a blow to the tune of $2.5 million, the loss at the Larsen counter a little less than $1 million. The deals struck by the brokerage house in order to acquire huge chunks of ITC on the BSE on September 22, at various levels, ranging in the band of Rs 702-723.50, mirrored the huge losses incurred by the brokerage house. While the actual sales were concluded on the NSE and BSE at Rs 660-levels, the stocks had to be purchased from Morgan Stanley and Canbank off-shore fund at a premium of over 10 per cent. Interestingly, while 4.23 lakhshares were acquired by the brokerage house in the demat mode, about 2 lakh shares have been acquired in the physical form which would be settled at the pay-in on September 24.

Similarly, in the case of Larsen, while about 1 lakh shares were sold around Rs 179/180 levels, the brokerage fund paid a premium of over Rs 10-12 to acquire about 90,000 shares on September 22. Highly placed sources at the brokerage, on conditions of anonymity confirmed that the two deals -- one on behalf of a London-based Jardine fund and the other done on behalf of George Soros fund -- were executed on September 18. They also highlighted the fact that a communication error was the root cause for the problems.

Sources highlighted that the order was actually that for sale of 2,000 shares of ITC which the local brokerage house due to a communication error assumed to have been 20 lakh shares. Similarly, in the case of Larsen, the order was only for 1000 shares while the brokerage house sold stocks to the tune of over 1 lakh shares.