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Nalini D'Souza
Mumbai, Oct 31: The Securities & Exchange Board of India (SEBI) has written a letter to the Bombay Stock Exchange (BSE) asking it to initiate procedures to ensure that 12 brokers of the exchange who have been indicted for price manipulation do not trade any further.
The regulator has asked the exchange to circulate the names of these entities and the action taken against them to all members of the bou-rse. After receiving the letter, exchange president JC Parekh has issued showcause notices to these members. Of the 12 brokers, eight have been suspended from trading by the exchange, which leaves only four brokers who are to be de-activated from Monday onwards.
Meanwhile, the market was agog with rumours that some of the indicted brokers planned to approach the Mumbai high court to appeal against SEBI's order.
Meanwhile, SEBI senior executive director LK Singhvi has gone out of town. BSE executive director RC Mathur is also out of the country, and is expected to return only on November 3.
Parekh saidthe issue of Rajendra Banthia stepping down from the governing board would be taken up later, once the issue was discussed within the exchange in detail.
The four members currently trading on the BSE are Ramrakh R Bohra, Mahico Pvt Ltd, Mefcon Securities and Harvest Deal Securities. The other brokers' terminals have been de-activated since the payment crisis which occurred on the BSE since June last week.
While the market was rife with rumours that these four brokers would appeal to the special vacation bench of the high court for a stay order against the SEBI diktat, there were arguments being put forward by some of the indicted brokers that they had been merely asked to cease from broking business, and this did not prevent them from doing business on their own account.
Sources say SEBI's letter to the exchange has, however, clearly mentioned that no fresh trading should be permitted.
SEBI has made a case against these 18 entities on the basis of insider- trading, price-rigging and fraudulent tradepractices. In the letter, SEBI has also cited previous cases of such violations by these entities.
In Harvest Deal Securities director Rajendra Banthia's case, his alleged role in price-rigging and cornering of shares of Nedungadi Bank, being probed by SEBI, has been cited. In the case of some other brokers, SEBI has cited cases of price-rigging and violation of auction regulations in Napa Papers and North Star.
Big Bull denies charges
Harshad Mehta has in a statement issued on Saturday denied his role in any price manipulation in the scrips of Sterlite, BPL and Videocon International.
Mehta has said that, "I am being made a scapegoat, this time for Sebi's failure to monitor the markets. I vehemently deny that I have indulged in any price manipulation or any activity violating Sebi rules. Instead of releasing reports to newspapers, Sebi should initiate appropriate proceedings if they feel any wrong has been committed. By going to the press in a high-profile manner, it is clear that Sebi intendsto tarnish the image of the people who create investor's wealth in the market. Sebi has also turned a blind eye towards bear operators who refuse to permit the revival of the capital market of this country, and are responsible for destroying national and investors' wealth."
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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