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Money > Business Headlines > Report April 27, 2001 |
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BPL moves appellate body against Sebi orderK Giriprakash BPL Group has filed an appeal with the Securities Appellate Tribunal against a Securities and Exchange Board of India order banning the group from accessing the capital market for four years for its involvement in price rigging. A top official of the BPL group said the appeal was as per its announcement last week that it will contest the Sebi order. In a major crackdown on the nexus between corporate and stock brokers, Sebi last week debarred Harshad Mehta for life from dealing in securities and also debarred BPL Ltd from accessing the capital market for a period of four years. The other companies debarred from accessing the capital market are Videocon International for three years and Sterlite Industries for two years. BPL Ltd has already denied any association with Harshad Mehta or his companies. It said neither BPL Ltd, or its promoters and directors have at any time sold their shares or in any way involved in market manipulation. Sebi is expected to issue show cause notices to all top directors of BPL, Videocon and Sterlite and also refer the matter to the Department of Company Affairs. The Sebi confidential report on market manipulations had revealed that Harshad Mehta used the Damayanti Group of companies as a front for manipulating the stock prices of BPL, Videocon and Sterlite. The report said Videocon, Sterlite and BPL on account of certain manipulations showed abnormal spurt and registered increase of 232 per cent, 41 per cent and 137 per cent respectively during April, 1998 to June 4, 1998 while the indices showed large decline. However, Harshad Mehta could not sustain the artificial increase in prices of these scrips in the wake of continuous fall of market since mid-May 1998. The price of BPL fell to Rs 109 from a high of Rs 446, Videocon fell to Rs 43 from a high of Rs 168 and Sterlite fell to Rs 155 from a high of Rs 385 within a month, the report said. "On account of creation of artificial market and continuous rise in prices, a large number of market participants and investors got induced to trade in these scrips and when prices crashed, they got trapped without finding any exit for their holdings purchased at artificially high prices," the report said. It said many investors suffered losses and erosion of their investments. Through such a process of manipulation, Harshad Mehta and his front entities perpetrated a fraud on the market and unsuspecting investors. "Investigations revealed that certain brokers of the BSE and NSE who were dealing in the BPL, Videocon and Sterlite scrips on behalf of Damayanti Group as a front of Harshad Mehta were in receipt of funds from these companies / related entities," the report said. "Investigations reveal that Digital was made a focal point by Damayanti Group entities to transfer funds to various entities, brokers etc on their behalf," the report said. The Damayanti group entities listed out were Rijuta Finvest Pvt Ltd, Ikshu Finvest Pvt Ltd, Damayanti Finvest Pvt Ltd, New Prabhav Finvest Pvt Ltd and Stable Construction Pvt Ltd. YOU MAY ALSO WANT TO READ:
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