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Sebi ends probe, revokes trades worth Rs 480 million on CSE

Aniek Paul

The Securities and Exchange Board of India (Sebi) has mandated the reversal of two sets of trades on the Calcutta Stock Exchange (CSE) amounting to Rs 480 million, both with one of the key defaulters, Harish Chandra Biyani.

Top-level CSE sources said the market regulator's probe at CSE, which ended Friday, identified Biyani's trades in DSQ Industries with SCHIL Retail, and in Global Software Ltd with SMIFS Securities, as trades which would have to be reverted. The exchange then complied and reverted the trades.

The Sebi probe revealed that Bombay-based broker with membership of two overseas bourses, was the biggest seller in DSQ Software and HFCL in the trading sessions after the Budget.

On the instruction of the market regulator, payment to the Bombay-based brokers was withheld, but was later released by CSE. Sebi had also identified a number of dubious trades, payment to which was impounded.

But in a surprising turn of events, the bourse on Friday disbursed all payments, reverting only the mentioned trades with Harish Biyani, on grounds that payment was not made by the buyer.

Biyani had bought DSQ Industries from SCHIL Retail on the rolling segment towards the beginning of this month. Biyani's payment obligation arising out of this trades was Rs 320 million, which he did not fulfil, forcing the exchange to revert the trade and return the shares to the custodian.

Sources also said that Biyani had bought 625,000 shares of Global Software from SMIFS Securities in settlement 2001148, resulting in a payment obligation of over Rs 160 million. Biyani had bought the shares through two trades, one of 300,000 shares, and the other of 325,000 shares.

CSE sources said shares sold by SMIFS Securities have been returned, while those sold by SCHIL Retail were being held by the bourse. "We have already asked the custodian to take delivery of the shares," sources added.

In its probe covering eight settlements 2001144-151, Sebi has examined trading details of the three key defaulters -- Harish Biyani, Ashok Poddar, Dinesh Singhania and seven other firms -- and associates of the defaulters. Trades of these 10 entities with about 15 others in the eight settlements were scrutinised in details.

Trading details of six stocks -- DSQ Industries, HFCL, Global Tele-Systems, Satyam Computer, Zee Telefilms and Silverline Industries were scrutinised separately.

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