The Hindu Business Line : Manipulation in DSQ Ind scrip — SEBI bans Harish Biyani for 5 years from market

An order passed by the securities watchdog has, in a reference to irregular transactions in the DSQ Industries scrip, is based on an extensive probe conducted with regard to deals by Biyani group entities in the stock.

DSQ Industries, now known as Jardine Overseas, had a paid-up of Rs 20.04 crore, chiefly held by various corporate bodies, including foreign outfits. SEBI, however, noticed that there were discrepancies in the distribution schedule filed by the company with the CSE and with the regulator.

In this backdrop, transactions by Biyani group entities were examined. It was observed that these entities dealt heavily in the DSQ scrip.

From the details of trade log and order log of CSE (from November 1, 2000 till March 31, 2001) it was observed that the shares were not frequently traded, with no major volumes observed till December 2000. The scenario changed thereafter. The price increased sharply from levels of Rs. 350- on January 1, 2001 to levels of Rs. 450/- on January 8, 2001.

SEBI observed that there was creation of artificial market and artificial volumes as a result of synchronisation in logging in/matching of buy and sell orders amongst few brokers. Orders were purchased within a gap of few seconds by Harish Biyani for the same quantity and same rate to ensure that buyers get the desired sellers and vice versa. Thus, there was circular trading also. There was price manipulation as the orders were placed at successively higher prices than the last traded prices.

Both Harish Biyani and Biyani Securities were declared defaulters on in March 2001 by CSE. One of the reasons for the payment problem was the building up of large outstanding positions by a few brokers in a few scrips - chiefly HFCL and DSQ - and volatility in prices during the relevant period.

SEBI sorts out price fixing riddle: The regulator has worked its way through the maze created by the Biyani group and others. Its probe has revealed the following:

During November 2000, Titan Stock Broking Ltd, Amritlal Gopalji Thacker and Niraj Balasaria artificially increased the DSQ price.

On December 20, 2000, the price increased from Rs 298 to Rs 320 when Biyani Securities traded in the scrip. In the next trade, when SMIFS Securities traded, the price increased to Rs 339, thanks to a cross deal between Hulda Properties and SMIFS Capital Markets.

A large number of trades were carried on only between two brokers - Harish Biyani and Amritlal Gopalji Thacker. There was creation of an "artificial market" - artificial volumes occurred through the synchronisation of logging in of orders.

Here is an example. On January 2, 2001, A G Thacker placed a buy order for 100 shares at Rs 366 when the last traded price was Rs 363.80. Within a span of nine seconds, Harish Biyani placed a sell order for 100 shares at the same price - Rs 366. These orders were matched at 14.52.28 hrs for 100 shares!

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Manipulation in DSQ Ind scrip — SEBI bans Harish Biyani for 5 years from market