Investigate ‘sensational’ research reports: Industry body asks SEBI

Our Bureau Mumbai | Updated on August 31, 2012 Published on August 31, 2012

These ‘reckless’ descriptions create panic in the market: Assocham

In view of some recent ‘sensational’ analyst reports, the Associated Chambers of Commerce and Industry (Assocham) in India has asked the market regulator SEBI to investigate these reports and take further steps to avoid recurrence of such instances.

Referring to the reports, Assocham, said these ‘reckless’ reports create panic in the market and cause ‘immense damage’ to the securities markets.

Assocham feels that there have been some “serious regulatory gaps” in dealing with these “meddlers” who try to fudge the market by rigging share prices of certain companies.

Under the guise

The industry body said that SEBI should take measures to curb the tendency to manipulate the capital markets to foster certain vested interests. These ‘spicy and sensational’ analyst reports come under the guise of investor protection, said Assocham.

Although analyst reports come under the guise of investor protection, they actually manipulate the markets due to vested interests, said Assoham.

The body has requested SEBI to conduct a detailed investigation to find out the ‘modus operandi’ of these meddlers, their market rigging strategy and activities of the recipients of the reports pre and post the analyst report.

SEBI should also look at the impact of these reports on the respective sectors and should take measures to prevent the recurrence of such instances to protect market integrity.

In the recent past, Canadian research firm Veritas Investment Research has produced strong reports questioning corporate governance practices of Indian companies. Practices of companies such as Indiabulls Group, Reliance Industries, Reliance Communications, Kingfisher Airlines and DLF have been questioned by Veritas.

When contacted for their comments on the Assocham letter, there was no response from the company.


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Published on August 31, 2012
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