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Money > Business Headlines > Report April 24, 2001 |
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First Global Broking denies Sebi charges of stock manipulationBhupesh Bhandari First Global Stock Broking has denied charges made by the Securities & Exchange Board of India in its report to the finance ministry that the outfit offloaded stocks to hammer down share prices in collusion with other brokers in the post-budget stock market crash and routed trades through lesser known entities to avoid scrutiny. "We have never done anything even faintly manipulative," First Global director Devina Mehra said. The Sebi report mentions that First Global offloaded shares of companies like Global Tele, HFCL, Zee Telefilms and DSQ Software. The report mentions that First Global sold 89,350 Global Tele shares and 212,876 HFCL shares to this effect. Reacting to the charges, Mehra said the total settlement of these stocks is over 30 million on the Bombay Stock Exchange alone and First Global's sale was a small proportion. "The shares sold by us are too small to cause their prices to fall," Mehra said adding that First Global was in fact long on some of these stocks during the period and has actually had to book losses on this count. On the charge of colluding with other brokers, Mehra said that at times First Global had to rent capacity from other brokers because of the restriction of carry forward trade not to exceed Rs 400 million on a single BSE card. "Now we have three cards. Earlier, if we ran out of capacity, we used the capacity of some other broker," she added. In its report to the finance ministry, Sebi has alleged that First Global conducted some trades through its sub-broker firm, Vrudhhi, in order to evade investigation. "Vrudhhi is a private investment company and all details were revealed to Sebi. There was no routing of trade," Mehra countered. According to Mehra, First Global has a strict code of internal compliance, which rules out any chance of manipulating the market. "When we got the mandate for Global Tele's merger with another firm, we decided there would be no more trading in the scrip, all old shares would be sold and a 30-day moratorium was imposed on recommendations on the stock," Mehra said. YOU MAY ALSO WANT TO READ:
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