SEBI found that shares of Empower Industries surged from Rs81 to Rs113 during 18 trading days with the total trading volume at 2.17 lakh shares and Kothari had allegedly been party to the circular movement and aided and abetted EIIL promoter-director Devang Master in manipulating the shares
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) imposed a penalty of Rs2 lakh on an individual for his alleged role in fraudulent trade in shares of Empower Industries, reports PTI.
In its order, SEBI said it is imposing “a penalty of Rs2 lakh on Nilesh Kothari in terms of the provisions... of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations”.
The matter relates to a probe conducted by SEBI in the shares of Empower Industries India (EIIL) during 16th February and 11 March 2005.
In the investigation, SEBI found that the company’s share surged from Rs81 to Rs113 during 18 trading days and the total trading volume stood at 2.17 lakh shares.
Kothari had allegedly been party to the circular movement and had had aided and abetted EIIL promoter-director Devang Master in manipulating the shares of the company.
SEBI noted that Kothari along with Devang had “carried out transactions in the market that led to a rise in the volume of the scrip and thereby induced the gullible investors”.
“...it does not appear to be a mere coincidence that the company made false announcements that facilitated in creating a general interest in the scrip and helped Devang and the noticee in carrying out their nefarious designs,” SEBI said.
Governor Subbarao also said the government and the RBI are working on various proposals to reduce gold imports
Mumbai: In a bid to wean away people from gold that is increasingly used as a hedge against inflation, the Reserve Bank of India (RBI) has said it is toying with the idea of launching inflation-indexed bonds (IIBs), apart from allowing banks to buy back gold, reports PTI.
“We introduced that (IIBs) some years ago but that didn't take up due to some design flaws. Since then, we have been trying to redesign it...” RBI governor D Subbarao said at the customary post-policy conference.
“From our side, the attraction of the IIBs is to wean people away from gold... if you provide an asset that gives inflation-indexed return (then they will invest in it).”
Certain issues were to be worked out, he said. “There were several questions apart from the design of the bond.
About which inflation index, do we peg to—WPI, CPI—and if we peg it to CPI, which is above 10% then what interest rate will be offered which will attract retail investors?” he said.
Subbarao also spoke about the issues related to timing the launch as the government may want to do it during falling inflation, while customers would want it during rising inflation.
Referring to the possibility of disruption of the G-Secs market due to launch of IIBs, Subbarao said, “One question which hunts us all the time is whether this will disrupt the G-Secs market.
“Because it is a wedge between the yield of IIBs and that of the G-Secs. However, if we educate investors they will see that this is pegged to inflation over a cycle and not to a particular point of time. Then, people will understand and invest in this”.
The governor also said the government and the RBI are working on various proposals to reduce gold imports. “We are shortly going to also consider whether we should allow banks to buyback gold. There are some regulatory prescriptions, where it is implied not very direct, says banks can’t buy back gold. That also we are examining.”
Higher gold import has taken a heavy toll on the economy with the current account deficit touching 5.4% in the second quarter. Recently, the government increased the import duty on gold to 6% from 4% to reduce inward shipments.
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