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Our Bureau

Kolkata , Aug 25

THE SEBI has pulled up a Bangalore-based partnership firm called Pragya Enterprises in the matter of Bhoruka Financial Services Ltd (BFSL), the scrip that was transacted on the Magadh Stock Exchange (MSE) in violation of norms.

The regulator's earlier order was directed against the exchange, the officiating ED, the MSE member concerned (Rajat Share & Stock Broker) and DLF Commercial Developers Ltd, the acquirer. The promoters of BFSL were also named.

The SEBI's latest move is based on the fact that Pragya Enterprises too was part of the "promoter group". Its partners sold 1.11 lakh BFSL shares, amounting to 56 per cent of the total quantity (1,98,850 shares) sold by the promoters to DLF.

Additionally, there were sales recorded by them in their individual capacities. These transactions were also executed at the uniform price of Rs 4,490 per share, acquired by DLF.

"The partners of Pragya Enterprises have been prima facie found to have gained unfairly," the order said, adding that the partners will have to deposit the proceeds in an escrow account with a nationalised bank, to be opened exclusively for this purpose.

Any person aggrieved by the order can approach the SEBI within 30 days.

The MSE council, incidentally, was superseded in 1997 and an administrator appointed to oversee its duties. Renewal was granted to the bourse, subject to the establishment of a settlement guarantee fund (SGF).

The MSE, which has failed to do so, cannot commence trading until an SGF is set up.

"The officiating Executive Director (OED) informed telephonically on August 10 to a junior officer in the SEBI in a casual manner about the commencement of trading during the course of a conversation regarding corporatisation and demutualisation scheme," the SEBI said, adding that it was later confirmed by the OED that trading had in fact started on August 1.

Trading took place during August 11-12 - a violation of norms.

Though the MSE had nil volume in 2004-05 and negligible volume in earlier years, there was an unusually high volume of about Rs 109 crore in just 10 trading days in August, it was stated.

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