SEBI wakes up from its deep slumber, bars 39 entities from the market

The market ‘watchdog’ has finally clamped down on entities which have been brazenly manipulating the market. If only they had had the time to read what we have been constantly exposing, a number of hapless investors would have been a happier lot now    

Time and again, Moneylife has been highlighting stories of price manipulation. It has been well over two years since our articles have been appearing, fortnight after fortnight, but the Securities and Exchange Board of India (SEBI) has been looking the other way.

Finally, somebodyor somethingseems to have woken up SEBI from its deep slumber.    

On 2nd February, the market 'regulator' barred 39 entities from "accessing securities markets for allegedly creating artificial volumes and price rise in certain scrips."

These entities belong to the Pabari-Parikh and Walmiki-Shah groups, according to SEBI. The scrips which they manipulated were LGS Global, Spectacle Industries, Goldstone Technologies, Gemstone Investments and Well Pack Papers.

But the sheer irony of this SEBI diktat will not be lost on readers of Moneylife. In our current issue (dated 10 February 2011), we reported that Spectacle Infotek's financials are absurd (despite many websiteswhich we prefer not to nameclaiming that it is a "profit-making" company). We added, "Investors have surely been trapped."  

If only the powers-that-be at SEBI had been reading Moneylife, they surely would have had their hands fulland their task cut out for them. And a number of investors wouldn't have parted with their money.

Last year (15 November, 2010), we had written (Insider trading: Why has it taken SEBI so long to wake up?)  on how the 'watchdog' has chosen to look the other way, despite the repeated instances of price manipulation and insider trading that we have constantly been trying to highlight.

In November last year, a senior official (who preferred anonymity) had told reporters: "Suspicious trading activities have been noticed in SEBI's routine surveillance of market activities; the regulator has decided to probe further into these cases and enhance its oversight for such matters going ahead."

"Suspicious activities have been noticed in many other shares also but those are minor (emphasis ours) in terms of trade value and nature," this official had said.

Moneylife had argued that this was a contentious statement. "If SEBI had indeed 'noticed' suspicious activities in other shares, why has it chosen to ignore them, in its own words, because they are "minor in trade value and nature"; shouldn't the regulator have come down hard on each and every case of market manipulation, irrespective of the number of shares, size of the company and value of transactions?"

Of course, SEBI did not bother to reply or clarify its position.

ML Bhakta, a Senior Partner of Kanga & Co., one of the country's leading barristerswith over half a century of experience in the legal domainhad told Moneylife: "I still wonder whether SEBI will ever wake up to the problem faced by unsuspecting investorsthe sudden rise in prices of unknown scrips without any logic or reason, particularly when Moneylife is repeatedly pointing out instances of such cases."

The market regulator has finally woken up. But is this action too feeble, and too late?

We'll leave that for Moneylife readers to decide.



Parmod Bhalla

6 years ago

I think SEBI is still sleeping on much bigger issues. Indian investors are watching helplessly to the price manuplations by FII's every day. When operators sell/buy huge quantities simultanously in different counters, why is there no regulation to check the same. In essence, it is no different than circular trading. Sometimes, I wonder why do we need FII's in Indian equity markets.



In Reply to Parmod Bhalla 6 years ago

indian stock mkts - FII = 0.

Parmod Bhalla

In Reply to sriram 6 years ago

Well, I donot know what you mean by this. I have been an active investor for thirty years in the Indian markets and have seen much better predicatble returns from this market based on fundamental approach to stock selection. My worry is that the wild swings induced by power money traps the newer investors in losing money. Has anyone seen any FII losing money and withdrawing from Indian markets? Who feeds the profits they make?

Rajan Manchanda

6 years ago

The entities involved in circular trading to rig prices and increase volumes and are barred from operating in the market will continue to function under different names. All are aware that scamsters barred from the market are openly trading today. The company managements are most often hand in glove with these unscrupulous operators. Not only the company managements loan the shares to the operators but even fund them to share the loot at the cost of the retail investors. Having lost heavily, the retail investors are absent from the markets today.

The operators found guilty along with the managements must be penalised heavily so that such practises come to an end. The companies should be barred from raising fresh capital and also from availing furter bank funding.Today trere is no detterent. Unless SEBI uses the stick , investors will continue to be taken for a ride. How difficult is it for SEBI to gather the information if it is serious to weed out these elements ? If there is a will there is a way.

Angelo Extross

6 years ago

It only goes to show that SEBI under Mr. Bhave has a very low score on accountability.
If watchdogs have low or no accountability then who will come to the rescue of the hapless investor?


6 years ago

Only when such irregularities are exposed will the common investor become confident and make strides into the market instead of sitting on the sidelines. Applaud Moneylife for blowing the whistle as often as they do. Glad SEBI is finally pulling its socks and regulating the market. Hope they tighten their reins on shady companies regularly.

Narendra Doshi

6 years ago

Several Moneylife issues need to be sent REGULARLY to newer members of SEBI each time to create a volcanic action enmass, internally. It is a constant effort expected of SEBI, irrespective of volume, size etc etc.
Maybe Moneylife organizes a special seminar with SEBI officials, someday, for the lonely investors?

Jet’s Q3 net profit up by 11% at Rs118 crore on high passenger traffic

The leading private airline in the country says there has been a robust growth in the domestic market on continued business confidence

Mumbai: Riding high on robust growth in passenger traffic and improved yields and load factor, Jet Airways has reported an 11%  higher net profit at Rs118.23 crore in the third quarter ended 31st December, from Rs105.80 crore in the corresponding period a year ago.

The private carrier's total income rose to Rs3,515.17 crore in the October-December quarter from Rs2,936.42 crore in the third quarter of the previous year, the airline stated.

Jet attributed the surge in net profit for a fifth consecutive quarter, to robust growth in the domestic market, on the back of healthy GDP growth and continued business confidence, reports PTI.

The airline achieved high levels of seat factor and yield growth, as passenger traffic grew by 19% in the period over that in the previous corresponding period. "Passenger bookings are showing encouraging trends in the current quarter," it stated.

While domestic traffic for Jet grew by 14% in the October-December quarter over the corresponding period in FY10, international traffic clocked an 18.8% growth. The airline recorded a seat factor of 76.9% and 80% on its domestic and international routes, respectively. At the same time, yields grew by 6.2% in the period under review over that in the previous corresponding period.

"Jet's international business has posted several consecutive quarters of consistent growth and profitability, reflecting the growing impact of our network synergies, major strategic international code shares and customer centric product and service focus," the airline said.


Food inflation soars to 17.05%, FM worried

Experts feel the RBI, which has raised key policy interest for the seventh time since March 2010, may go in for yet another hike in its mid-quarter monetary policy review next month

New Delhi: Providing no respite to the common man, food inflation rose to 17.05% for the week ended 22nd January, as finance minister Pranab Mukherjee expressed "grave concern" and assured steps to moderate it, reports PTI.

Driven by higher prices of vegetable, fruits and eggs, food inflation increased for the second week in a row, soaring by 1.48 percentage points from 15.57% in the previous week. Food inflation had stood at 20.56% during the same period a year ago.

"Price rise always, particularly, the commodity price and food items are matter of grave concern" Mr Mukherjee told reporters when asked to comment on the rising inflation.

Mr Mukherjee said efforts are being made both from the demand and supply side to moderate it.

Although the vegetable prices are likely to moderate in the coming weeks, protein-based food items like milk, fish and egg are expected to remain firm.

"Real stubborn components are the fibre items, milk, eggs and fish. We need to improve production, storage facility and processing," Crisil's principal economist DK Joshi said.

Moreover, he added, the impact of political crisis in Egypt and other Middle-East countries on global crude oil prices may cast a shadow on headline inflation, which shot up to 8.43% in December from 7.48% a month ago.

Inflation in "fuel and power" segment showed an increase of 11.61% year-on-year following an increase of petrol prices by Rs2.50 per litre in January.

Among vegetables, onion prices on annual basis rose by 130.41% in the third week of January, although they have moderated considerably in the recent days.

Vegetables as a whole became dearer by 77.05% on an annual basis followed by fruits (15.47%), eggs, meat and fish (15.05%), milk (11.41%) and potato (6.22%).

The uptick in latest food inflation figure is likely to put further pressure on the government to provide relief to the common man in the coming budget.

Both the government and the Reserve Bank of India (RBI) have been grappling with high inflation and slowing industrial growth that dipped to the 18-month low of 2.7% for November.

Experts feel the RBI, which has raised key policy interest for the seventh time since March 2010, may go in for yet another hike in its mid-quarter monetary policy review next month. The review is scheduled for 16th March.

Deloitte's principal economist in India Shanto Ghosh said the government needed to take steps to remove supply bottlenecks and plug leakages in the distribution system to tame price rise on a sustained basis.

As regard the expectations in the short-run, he said, "I expect the rising trend to be reversed within the next few weeks."

According to the government's estimates, India loses agri products, fruits and vegetables to the tune of Rs1 lakh crore annually due to want of adequate cold chains and back-end infrastructure.

Last evening finance minister Pranab Mukherjee had said that in large economies like India, periodic fluctuations in inflation "are not unusual".

In the remaining three months of the fiscal, he added, "there may be some fluctuations".

The RBI has increased the year-end headline inflation forecast to 7% from earlier estimate of 5.5%.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)