Financial Daily from THE HINDU group of publications
Tuesday, Oct 19, 2004
Financial Daily from THE HINDU group of publications Tuesday, Oct 19, 2004 |
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Investor Grievances Markets - Stock Markets Info-Tech - Stocks Share transactions on Oct 12 — Affected investors in SSI move HC for redress Virendra Verma
Mumbai , Oct. 18 A GROUP of investors in SSI shares on Monday filed a writ petition in the Mumbai High Court seeking to annul/ reverse all transactions in the shares of the company that were traded on October 12 on the BSE and NSE. The investors have also pleaded that the court direct SEBI to carry out a detailed enquiry into the matter. These investors, who bought the shares on that day, sought to treat October 14 to 19 as the no-delivery period for the shares instead of October 12 to 19 in view of the removal of the price band for the shares on the exchanges on October 14. The investors had suffered heavy losses running into crores of rupees following the sharp fall in the stock price of SSI on October 14, the next trading day, as the BSE and NSE removed the circuit filter.The investors who bought shares on October 12 at around Rs 165 later realised that they would not receive shares of the de-merged IT company, but only in the residual business. The Chennai-based software company had de-merged its IT business into a separate entity, Scandent Network Pvt Ltd. The residual training business rests with SSI. Investors have sought relief by restraining stock exchanges from recovering the price of SSI shares purchased by them on October 12. In case this is not possible, the investors have petitioned that exchanges should not make any pay-out of funds in the shares of SSI. According to the petition, the investors have charged that the BSE and NSE should have removed the price bands on the first day of the no-delivery period, that is on October 12 or, as an alternative, the exchanges should have suspended trading in SSI shares, till the completion of allotment of shares of the new entity, to protect the interest of shareholders. They have further pointed out that the BSE and NSE deviated from the normal practice of removing the circuit filter on October 12 and allowed trading in SSI shares to take place with 10 per cent circuit filter. On October 14 (the next trading day), the exchanges rectified their lapse by removing circuit filter at the commencement of trading and flashed their notice, approximately two minutes after the commencement of trading, on account of de-merger of IT services business of SSI. The notice flashed by NSE said "further to our notice dated September 27, 2004 and in consideration of request received from members in request of de-merger of IT services business of SSI, the exchange with a view to facilitate price discovery, decided not to apply price bands for trades done today."
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