The Hindu Business Line : SEBI suspends CSE member Daga

SEBI has suspended B.D. Daga, member of Calcutta Stock Exchange, for irregularities while dealing in the stock of MP Investment & Consultancy Services (MPICS).

The order, passed by the SEBI Chairman, Mr G.N. Bajpai, is based on an investigation into the pattern of trading in the counter, which revealed that provisions of SEBI Act, 1992, and a couple of other legislations were contravened.

The SEBI probe found that there were many cross deals (wherein both the buyer and seller belonged to the broker) with complete matching of the order price, quantity and order time. It was also established that there were large-scale transactions only with a view to earn brokerage.

The broker, incidentally, had submitted a reply, following a show-cause notice, stating that he had already given an undertaking that he was merely concerned with earning brokerage and he had only executed the buy and sale orders given by clients.

It was found that between July 2001 and October 2001, the broker (along with other two other CSE members) generated maximum volumes in the scrip. In all, 18,27,060 MPICS shares were traded on Lyons Range during this period; the broker had transacted 4,03,800 shares between settlements number 2002117 to 2002121 and 2002126, constituting over 22 per cent of the volumes.

During this period the price of the stock declined by 68 per cent from Rs 45.25 to Rs 14.30.

It was further ascertained that 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. Except in a few cases, all the orders were matched with no obligation for delivery to the exchange. There was a common set of clients.

"The average price had declined sharply from Rs 45.25 to Rs 14.30, a decrease of more than 68 per cent in settlement nos. 2002117 and 2002129. Also, there was no transfer of title in the shares since both the purchase and sell quantities were exactly the same. The value and volume of the impugned transactions were also quite high. The transactions were highly irregular and defeat the purpose of normal order matching mechanism in the price discovery process in the exchange", SEBI has mentioned.

Suspension: Meanwhile, the CSE on Monday suspended two counters - Awdhan Trading Co and Bihar Mercantile Union - which have been delisted from the exchange. A notice sent to members mentioned that both counters have been removed from the official quotations.

More Stories on : Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
S.B. Mathur appointed UTI-I Administrator

Oppenheimer stake in Divi's

Indecisive move

Aberdeen Asset stake crosses 5% in Satyam

Sabero Organics gains on export thrust

Spirit up for it

SEBI suspends CSE member Daga

Pharma, cement, paper stocks find flavour

Steel City Securities plans IPO

UTI employees moved by Damadoran's exit

Finance Ministry defends Damodaran's move to step down