Business Daily from THE HINDU group of publications
Tuesday, Jun 16, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Tuesday, Jun 16, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Markets
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Regulatory Bodies & Rulings
Our Bureau Kolkata, June 15 SEBI on Monday let India Infoline off the charges of fictitious and manipulative transactions in GHCL Ltd stock, but sanctioned the listed market intermediary for “lack of promptness, care, diligence and cooperation” in submitting information during the adjudication proceedings. After a sharp rise in price and trading volume in the GHCL stock between November 6, 2006, and March 31, 2007, the market regulator carried out an investigation into the role of brokers and their clients who traded in the stock. SEBI had observed during the investigation that certain entities had indulged in synchronised or fictitious trading in the shares of GHCL in such a manner that led to creation of artificial volume and impacted the price of the stock. India Infoline was alleged to have executed synchronised transactions in GHCL shares for Jalco Financial Services and Wilful Finance and Investment, which in turn violated the code of conduct of brokers. It was alleged that Jalco Financial and Wilful Finance and Investment entered into several synchronised trades, out of which 36 were transacted through India Infoline. The brokerage, through these synchronised transactions, created a volume of 8,67,000 shares, it was further alleged. However, the SEBI adjudicating officer, Mr V.S. Sudaresan, found that India Infoline had merely acted as an agent for its clients and carried out the orders on the screen-based trading system. The SEBI order said that there was no reason for India Infoline to suspect the credential of Jalco Financial Services and Wilful Finance and Investment at the time of executing the transactions, and that they were indulging in any sort of manipulation in the scrip of GHCL. It said that the alleged violation of the provisions of Brokers Regulations by India Infoline, as alleged in the show-cause notice, did not stand the scrutiny and the matter was disposed off. The SEBI order, however, noted that India Infoline was a “registered intermediary in many capacities and also a listed company”. A greater degree of cooperation was expected from such an entity, SEBI pointed out. “However, the lack of promptness, care, diligence and cooperation of the Noticee (India Infoline) in submitting the necessary information indicates that its conduct was far from satisfactory during the adjudication proceedings,” the SEBI order said. More Stories on : Regulatory Bodies & Rulings | Financial Services
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