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Tuesday, Aug 10, 2004

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SEBI launches probe into `insider trading' in GTB shares

Our Bureau

Mumbai , Aug. 9

THE SEBI Chairman, Mr G.N. Bajpai, today said that the regulator has launched an investigation into the alleged insider trading in Global Trust Bank (GTB) securities before the announcement of moratorium and merger with Oriental Bank of Commerce by the Reserve Bank of India .

"We have called for trading data from stock exchanges and are investigating the matter," Mr Bajpai told newspersons on the sidelines of a function organised by the NSE. The trading volume in GTB shares rose sharply from the middle of June till the time the RBI announced the moratorium. The Government had placed the ailing private sector bank under a three-month moratorium on July 24 and later initiated its merger with Oriental Bank of Commerce. On reports that the Government was seeking clarification from the SEBI on insider trading in GTB, he said that the regulator had not received any written communication from the Government on the issue.

Asked why the securities of GTB are still trading despite the RBI placing nil value to the shares, he said that as long as there are buyers and sellers for the securities, trading in the securities may take place.

Even after the merger announcement without any share swap ratio, implying that the GTB shareholders will be the last to receive anything, trading volumes in GTB shares remain high. Earlier, inaugurating the electronic issuer interface facility at the NSE, Mr Bajpai said that the exchange trading platform was an appropriate mechanism for instant dissemination of information.

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