Press Information Bureau

Government of India

Ministry of Finance

05-September-2012 18:17 IST

19 Entities Restrained From Securities Market Trading

The securities market regulator – Securities and Exchange Board of India (SEBI) – vide its order dated August 3, 2012 passed an ad interim ex-parte order restraining 19 entities from accessing the securities market and further prohibiting them from buying, selling or dealing in securities in any manner whatsoever, till further directions.

SEBI observed abnormality in price movement of certain mid-cap stocks viz, Pipavav Defence and Offshore Engineering Company Limited, Parsvnath Developers Limited, Tulip Telecom Limited and Glodyne Technoserve Limited on July 26, 2012. In the preliminary analysis it was found, inter alia, that:

• Groups of related entities were found to be trading substantially in these mid-cap stocks and their income details captured in Know Your Client (KYC) records were not found to be commensurate with their trading pattern.

• These groups of related entities had placed sale orders of substantial quantities, as fully disclosed orders, at prices significantly below the Last Traded Price (LTP), thereby contributing to the fall in prices of these stocks.

In the light of the preliminary findings in this matter, pending detailed investigation, SEBI issued the aforementioned order. This was to prevent any further harm to investors and securities market and in order to protect the interest of investors and the integrity of the securities market.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.

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DSM/RS/Hb

Market access restraint imposed after suspicious coordinated trading causing mid cap price manipulation, pending investigation to protect investors. SEBI issued an ad interim ex parte order restraining nineteen entities from accessing the securities market and from buying, selling or dealing in securities pending detailed investigation, after preliminary findings showed related entities trading substantially in certain mid cap stocks with KYC income not commensurate with trading patterns and placing large disclosed sell orders materially below the Last Traded Price, thereby contributing to price declines; the interim order was taken to protect investors and market integrity.