Sebi issues show-cause notice to Harshad, others

After a long delay, the Securities and Exchange Board of India (Sebi) on Monday issued show-cause notices to Harshad Mehta and BPL, Videocon and Sterlite in the price rigging and the payments crisis which shook the markets June last year. This is the first time that Mehta is being served with a show cause notice in this case, the others being BPL, Videocon and Sterlite the companies whose scrip prices were allegedly manipulated. In the show cause notice to Mehta, he has been asked to explain why proceedings should not be initiated against him under Sebi laws for his alleged involvement in the payments tangle. According to the investigations undertaken by Sebi, the brokers and sub-brokers involved in the entire deal, did not charge any upfront margins for their clients, that is the Damayanti group. Acting in concert with other brokers they cornered a large quantity of shares of BPL, Videocon and Sterlite, created an artificial market, manipulating the prices of these scrips and upsetting the market equilibrium. The brokers were found guilty of violating the provisions of Sebi (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations 1995.