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Sebi, I-T call for in-transit data

Janaki Krishnan in Bombay

The Securities and Exchange Board of India (Sebi) and the Income Tax Department are awaiting details of in-transit shares from the depositories, since this will conclusively prove the actual money made by brokers in the past three months.

Further, it will also serve as evidence indicating that broker-directors did indulge in proprietary trades on the basis of privileged information.

Sebi has sought details of in-transit shares positions of ten brokers for the last twelve settlements, which effectively covers January, February and March. Among the brokers, whose details have been asked for, are those of Anand Rathi Securities and associated brokerages, Sanjay Singhania and associate brokerages.

According to sources, the information, which incidentally varies with each broker, will not only nail the brokers themselves but will also provide a clue as to clients on whose behalf the trades have been conducted.

Most times clients let the shares remain in the clearing members pool account (on its way from the clearing corporation's pool account) as they want to hide capital gains and thus avoid income tax. Here is where the role of the tax authorities come in.

The audit trail will also prove whether the shares in any broker's pool account is ultimately meant for delivery to his beneficiary account - in which event it would be proof that those were his proprietary trades.

For those broker directors, who have been charged with obtaining privileged information and using this for their own purposes, sources said that once the shares in the pool account can be matched to the scrip-wise information sought by them, it would be a pointer to their involvement.

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