Mid-cap stock crash: Sebi bars 19 entities

Cracking the whip against market manipulation,the Securities and Exchange Board of India (Sebi) on Friday barred 19 entities from the capital market till further orders for their involvement in the mid-cap stock crash on July 26. The move follows an initial probe into the plunge of 20-26% in the shares of Parsvnath Developers,Pipavav Defence and Offshore Engineering,Tulip Telecom and Glodyne Technoserve on July 26 at the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). In an interim order issued on Friday,Sebi whole-time member Rajeev Kumar Agarwal said,“On July 26,2012,Sebi noticed a downward movement in prices of certain scrips as compared to their closing prices on July 25 at the NSE and BSE. Pipavav Defence and Offshore fell by 19.96%,Parsvnath Developers by 19.91%,Tulip Telecom by 25.97% and Glodyne Technoserve by 19.98%.” “During 15 days prior to July 26,2012,no corporate announcements/price sensitive information was disclosed to the exchanges by these companies which could have impacted the share prices negatively,” Sebi said. 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 Private Limited ,A to Z Steels Private Limited Ajit Kumar Jain,Cheminare Trade Comm Private Limited G N Credits Private Limited Gajria Jayna Precision Industries and Kuvam Plast. The others among the 19 barred entities include Littlestar Vanijya Private Limited Manish Agarwal,Milestone Shares and Stock Broking Private Limited Neelanchal Mercantile Private Limited North Eastern Publishing and Advertising Company,Passions System Solution Private Limited Premium Hospitality Services,Ramkripa Securities Private Limited Umang Nemani,Venus Infosoft Private Limited White Horse Trading Company and Yashika Holding. These persons and entities can file their objections,if any,within 21 days from the date of this order,Sebi said. 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 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.