The Hindu Business Line : SEBI suspends CSE member

THE Securities and Exchange Board of India (SEBI) has suspended Mr Dinesh Kumar Kanoria, member of Calcutta Stock Exchange, for irregularities carried out while dealing with the scrip of MP Investment & Consultancy.

The suspension, valid for a month, followed a probe into transactions in the counter, which showed that the broker had violated a number of legislations, including SEBI Act, 1992. A SEBI enquiry officer found there were many cross deals, courtesy trades that were artificial in nature and done to create a false appearance of trading in the market.

The broker had, in a reply, stated that all transactions were executed for clients, while trades were done only with a view to earn brokerage. Also, there was no intention to manipulate prices. However, cross deals did take place. SEBI found that over 18 lakh shares of the company were traded during the relevant period, in which the price actually fell by 68 per cent, from about Rs 45 to roughly Rs 14.

The regulator's order has stated that the price and order times were completely matched in a series of transactions. "The time lag between punching of buy and sell orders was under a few minutes/ seconds and almost the same in a number of transactions," it has pointed out. In fact, the same quantity of shares were bought and sold at the same price on the same day. Resultantly, there was no net obligation of the broker to the exchange. Further, both the buying and selling clients belonged to the broker.

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