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Midcap crash: SEBI bars 19 entities from markets

The probe relates to a sharp plunge of 20-26% in the shares of Parsvnath Developers, Pipavav Defence and Offshore Engineering, Tulip Telecom and Glodyne Technoserve on 26th July at the BSE and NSE

 
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has barred 19 entities from the securities market after an initial probe into the recent share price plunge in some mid-cap stocks, including Parsvnath, Tulip Telecom and Pipavav Defence, reports PTI.
 
Passing an interim order against these entities, which includes individuals and companies having dealt in these stocks, SEBI said it would expeditiously complete its investigations into the matter.
 
The entities restrained from accessing the securities market and prohibited from buying, selling or dealing in securities in any manner whatsoever, include 4a Financials Securities, A To Z Steels, Ajit Kumar Jain, Cheminare Trade Comm, G N Credits, Gajria Jayna Precision Industries, Kuvam Plast Pvt Ltd, Littlestar Vanijya Pvt Ltd, Manish Agarwal and Milestone Shares & Stock Broking Pvt Ltd.
 
The others among the 19 barred entities include Neelanchal Mercantile Pvt Ltd, North Eastern Publishing & Advertising Co, Passions System Solution, Premium Hospitality Services, Ramkripa Securities, Umang Nemani, Venus Infosoft, White Horse Trading Co and Yashika Holding Pvt Ltd.
 
These persons and entities can file their objections, if any, within 21 days from the date of this order, SEBI said in the order passed on Friday.
 
The probe relates to a sharp plunge of 20-26% in the shares of Parsvnath Developers, Pipavav Defence and Offshore Engineering, Tulip Telecom and Glodyne Technoserve on 26th July at the BSE and NSE.
 
SEBI said a sharp downward movement was noticed in these stocks between 0915 and 0949 hours on that day. These stocks witnessed sharp intra-day price volume movement on both BSE and NSE on 26th July, although no major corporate announcements or price sensitive information was disclosed to the exchanges by these companies during previous 15 days.
 
After analysing the trading activity of major clients, NSE and BSE found that some of these clients were not only common across these scrips but they also traded on both the exchanges.
 
A further probe into the matter found that the top identified clients whose sell volume constituted a significant share of the total sale transactions in these stocks accounted for up to 95% of the total sale transactions.
 
SEBI said the analysis of trade data showed that these traders were instrumental in pushing down the prices of the concerned stocks, as they were observed to be placing the sell orders below the best sell prices as well as the best buy prices available on various occasions.
 
Also, during the day, many entities related to the some of the traders were top net sellers in these scrips.
 
The regulator further said relationships have been established among some of the clients as per information available in its surveillance system, KYC details available with the stock exchanges, MCA databases and other publicly available sources.
 
Among others, Neelanchal Mercantile Private Ltd and Milestone Shares & Stock Broking Pvt Ltd have a common phone number and a common Kolkata address. Flex Trade Pvt Ltd, Adish Jain and Manish Agarwal also have common phone number and a common address in Kolkata.
 
Milestone Shares & Stock Broking Pvt Ltd, Ajit Kumar Jain and Manish Agarwal were also found to have a common phone number.
 
Ajit kumar Jain is director in Mukesh Trade & Finance Ltd, which shares its phone number with Divya Drishti traders Pvt Ltd, which along with a few other related entities have been previously debarred from trading in market in the matter of creation of artificial market and price manipulation in scrip of Tijaria Polypipes Ltd.
 

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Cabinet fixes Rs14,000 crore as reserve price for telecom spectrum

The reserve price fixed has come as a disappointment for the telecom industry which had been pitching for a 80% cut in the reserve price suggested by TRAI, which they felt would lead to up to 100% hike in mobile telephone charges

New Delhi: The Cabinet on Friday fixed a minimum or base price of Rs14,000 crore for the Supreme Court mandated auction of telecom spectrum, reports PTI.

 

The Cabinet, headed by Prime Minister Manmohan Singh, decided to fix the reserve price at the lower end of the Rs14,000 crore to Rs15,000 crore band that was recommended by an Empowered Group of Minister (EGoM), official sources said.

 

The EGoM had suggested a reserve price at Rs14,000-Rs15,000 crore for 5 Mhz of airwaves as against around Rs 18,000 crore recommended by sectoral regulator Telecom Regulatory Authority of India (TRAI) for the auction of spectrum vacated from cancellation of 122 licences by Supreme Court.

 

Sources said the Cabinet approved levy of annual spectrum usage charge of 3% to 8% on different slabs of revenue as was recommended by the EGoM headed by P Chidambaram.

 

Chidambaram has been made the Finance Minister in a minor Cabinet reshuffle early this week.

 

The apex court had in February this year cancelled 122 licences issued by the then Telecom Minister A Raja in 2008 and asked the government to conduct fresh auctions by 31st August. But this deadline may not be met and the government may approach the apex court for extension of the timeline.

 

The reserve price fixed would be a disappointment for the telecom industry which had been pitching for a 80% cut in the reserve price suggested by TRAI which they felt would lead to up to 100% hike in mobile telephone charges.

 

The auction is crucial for companies like Uninor and Sistema Shyam Teleservices, who have time till 7th September to offer their services after which they will be forced to close down their operations in case they fail to get a licence

 

Earlier, the EGoM, headed by P Chidambaram, has suggested a 20% lower base or reserve price at Rs14,000-Rs15,000 crore for 5 Mhz of airwaves as against around Rs18,000 crore recommended by sectoral regulator TRAI for the auction of spectrum vacated after the Supreme Court order.

 

The telecom industry has been pitching for a 80% cut in the reserve price as they feel TRAI recommended rates would lead to up to 100% hike in mobile telephone charges.

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