Stories of price manipulation
Warner Multimedia (Rs3)
You would have never guessed that a company named Warner Multimedia is into the business of financing and not entertainment or IT. The company and its entities were 
debarred from accessing the securities markets by SEBI for three years, between 2006 and 2009, for artificial market creation and price manipulation. Even the Reserve Bank of India had passed an order against the company for unauthorised collection of public deposits on 29 November 2010. According to the company’s 2012 annual report, it did not conduct any business during FY11-12 and Rural Electrification Corporation (REC) had seized some of its assets for non-repayment of a loan. Its fundamentals are terrible. It made a net profit in just one out of the past eight quarters and earned revenues in just three of those. The total combined sales over the last eight quarters was negligible whereas the total combined losses, for the same period, stood at a whopping Rs17.34 crore.
Yet, its stock price rose 84%, from Rs1.38 to Rs2.54, between 15 October 2012 and 5 September 2013. Neither the BSE nor SEBI seems to be concerned.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
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