The Hindu Business Line : SEBI bars 7 brokers from share debut trading

Mumbai April 27 Securities and Exchange Board of India has barred Mr Latesh Chedda, Mr Viren Kenia, Mr Bhavin Chedda, Mr Chetan Rathod, Neptune Fincot P Ltd, Mr Dhiren Pajwani and R SS Investment Ltd. from buying, selling or dealing in securities, directly or indirectly on the day of listing of securities on the stock exchanges.

This follows order book manipulation by them of the securities on debut.

SEBI conducted a preliminary analysis in the dealings of shares of Pochiraju Industries Ltd, Cambridge Technology Enterprise Ltd, MindTree Consulting Ltd, Shree Astavinayak Cine Vision Ltd, Pyramid Saimita Theatre Ltd and AI Champdany Industries Ltd based on the alerts received from the Integrated Market Surveillance System (IMSS).

The order dated April 26 states "certain entities had placed abnormally large orders of shares at prices much below prevailing market prices and unusually also revealed their large order quantities fully."

Frivolous orders

Going by SEBI, the orders for the stocks were placed at a price much lower than the existing market rates rendering them as frivolous or non-serious orders with no commercial sense. The intention was to create an artificial increase in demand and provide artificial depth to the order book.

Also, the entire large order was revealed to the market at one stroke, which is an uncommon practice in the market, said SEBI's order. The annual income of these entities is disproportionate to the likely financial exposure implied by the large orders when executed.

SEBI has asked brokers - R SS Investments, Maniput Investments Pvt Ltd, Magnum Equity Broking Ltd and Prashant Jayantilal Patel - through whom these entities have dealt in the shares of the companies to be cautious and exercise due diligence while dealing on behalf of their clients.

Shares plunge

Shares of MindTree fell as much as 10 per cent but recovered to close at Rs 775.5, down 1.05 per cent, on the Bombay Stock Exchange

Other stocks named, however, plunged to a maximum permissible limit.

Pyramid Saimira plunged Rs 35.7, or 10 per cent, to Rs 321.8. AI Champdany Industries Ltd fell 5.85 rupees, or 5 per cent, to Rs 111.45.

Pochiraju Industries Ltd dropped Rs 1.60, or 6.6 per cent, to Rs 22.55. Cambridge Technology Enterprise Ltd declined Rs 4.15, or 6.6 per cent, to Rs 59. Shree Astavinayak Cine Vision Ltd slid Rs 8.45, or 5 per cent, to Rs 161.55.

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