The Hindu Business Line : Cracking the whip

The extensive investigation into the IPO scam by the Securities and Exchange Board of India (SEBI) was always heading towards a tough crackdown. In a 252-page interim order, SEBI has barred 24 brokers "not to buy, sell or deal in the securities market including in IPOs, directly or indirectly, till further directions." The highly publicised modus operandi clearly shows that the IPO allotment process had been manipulated by some key individuals/brokerages for personal gain.

This development sent panic waves through the stock market; with the BSE Sensex opening 490 points lower on Friday's trade. But SEBI's clarification that retail investors could continue to trade with their retail brokers calmed frayed nerves.

While the market staged a smart comeback, it still remained somewhat jittery through the day. That is, until the last hour of trading when, based on oral and written submissions by Indiabulls Securities, SEBI decided to keep the company's order in abeyance. This direction bolstered the market and pushed it into the positive zone.

The fearless duo of SEBI Chairman, Mr. M. Damodaran and wholetime member, Mr. G. Anantharaman, have been championing the need to protect the market from manipulative practices and restore the confidence of the retail investor.

Krishnan Thiagarajan

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