MUMBAI, FEB 25: It is now quite clear that the stock markets knew about the takeover of Merind Ltd. The share price of Merind had shot up by nearly 9.94 per cent to Rs 191.30 from Rs 174 on the Bombay Stock Exchange on Tuesday - one day before the sell-out was announced after a board meeting of Wockhardt Ltd - indicating that there was insider trading in the scrip.At Tuesday's level, the Merind scrip was at 52-week high and the top gainer in the B1 group of the BSE. Operators also ensured that the scrip remained within the 10 per cent circuit filter limit (otherwise trading would be suspended). Merind rose to a new high of Rs 194.10 on the National Stock Exchange on Wednesday following heavy specualtion.
``There is no rationale for the sudden spurt in Merind share price on Tuesday. Some operators seemed to have prior knowledge about the takeover. It looks like a case of insider trading,'' said a market source.
In fact, the Merind scrip had shot up by Rs 46 (from Rs 125) in the last one week. Marketcircles expect further rise in the share price of Merind as Wockhardt will be paying Rs 260 per share to buy out the Tata stake in the company.
``It is not clear who is the `insider' in the Merind case. Somebody has benefitted from the deal. As per the Sebi regulations, this is violation of norms,'' sources said. It may be recalled that the BSE had investigated excessive speculation in Merind scrip some months ago, but the outcome of the probe is not known.
Moreover, SEBI had sent a show-cause notice to Hindustan Lever for alleged insider trading when Brooke Bond Lipton merged HLL two years ago.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
