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Money > Reuters > Report March 20, 2001 |
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Amara Raja price rigging probe launchedThe Securities and Exchange Board of India (Sebi) is investigating alleged price rigging of the stock of Amara Raja Batteries, which makes industrial and automotive batteries, domestic newspapers reported on Tuesday. Sebi has also asked the Bombay Stock Exchange (BSE) to expedite its probe into the share price movements of Amara Raja Batteries, a senior Sebi official said. "The BSE had already begun its probe into the matter and when we received complaints on the same matter we asked them to take it up on a priority basis," Sebi senior executive director L K Singhvi said. The Bombay Stock Exchange and the National Stock Exchange have been asked by the market regulator to provide details of trades conducted by three brokers who have allegedly manipulated the stock price since November, the Business Standard said. Amara Raja's share price nearly tripled over the past five months, surging from Rs 112.20 on November 1 to a 22-month high of Rs 320 earlier this month. The Business Standard said these brokers manipulated the stock price by indulging in circular trading -- colluding to arouse investors' interest in a stock by buying and selling a company's shares amongst themselves. The rising trading volumes and surging share price attracted investors to whom the brokers subsequently sold their shares, the newspaper said. As the colluding brokers dumped their shares, the stock price plunged by more than 70 per cent to Rs 93.75 at Monday's close. Nevertheless, The Economic Times said there was talk in the market that the brokers who allegedly started the price manipulation in Amara Raja's stock had recently defaulted on settlement payments. Around 20 broker belonging to both the BSE and the NSE were affected by this default, the paper said.
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