The Hindu Business Line : SEBI not to renew Magadh bourse recognition

Mumbai, Sept. 4 The Securities and Exchange Board of India (SEBI) has decided not to renew the recognition granted to Magadh Stock Exchange Ltd as it was found violating capital market regulations.

An order issued by Dr T.C. Nair, Whole-time member of SEBI, directed the exchange to transfer the money available with the investor protection and investor services funds of the exchange to SEBI’s Investor Protection and Education Fund. The exchange has also been prevented from selling or transferring any moveable or immoveable properties.

Violation

According to SEBI, the exchange had been functioning in violation of SEBI guidelines.

Magadh stock exchange was in the news last year when SEBI had passed an order against its for allowing trading in the stocks of Bhoruka Financial Services Ltd (BFSL) which was not listed on that exchange.

The buyer of the stocks was DLF Commercial Developers Ltd and the seller was the promoter of BFSL, the trading accounted for 99 per cent of the trading volume of Rs 90.06 crore. The exchange had subsequently sacked its executive director.

The SEBI order also directed that exchange to set aside sufficient funds to provide for settlement of any claims. Companies exclusively listed on the exchange may consider seeking listing at other stock exchanges or provide for exit option to the shareholders; certificate of registration of trading members granted by SEBI shall stand automatically cancelled, said a SEBI press release.

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