MUMBAI, Oct 30: The Securities and Exchange Board of India (SEBI) has decided to crack its whip against 18 brokers who indulged in price rigging activities during April and June this year. The share concerned were of Videocon International, Sterlite and BPL. It has also established the role of the securities scam accused Harshad Mehta in the price manipulation of these scrips.Investigations carried out by the market regulator has revealed that a set of brokers acted on behalf of front entities of Mehta, who was involved in the scam of 1992, in cornering large chunks of these scrips on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).The SEBI Senior Executive Director, L K Singhvi said today that enquiry proceedings have been initiated against 23 brokers of BSE and 11 of NSE. Of this, 18 have been debarred from broking activities from November 2, until proceedings are completed and orders passed.Among those who have been punished are a vice-president of the BSE, RajendraBhanthia and his firm Harvest Deal Securities.The other brokers debarred comprises 11 brokers from the BSE and 6 brokers of NSE. They are: GNH Global Securities, Satyanarayan Nangalia, RR Mohta, SN Tara & Co, PR Shah Share & Stock Brokers Pvt Ltd, Ramrakh R Bohra, Mahico Pvt, Mefcon Securities, Lalkar Securities, Bharat J Patel, Sony Securities, Digital Leasing & Finance, Valfin Financial Services, Stenly Credit Capital, Asian Securities & Stock, Star Share & Stock Brokers and Malar Share Shoppee.According to Singhvi, two persons namely Anil Doshi and Dinesh Doshi are the close relations of Harshad Mehta. ``These persons have no financial track record or worth of their own nor do they have experience or the professional expertise to undertake such securities transactions,'' explained Singhvi.The market regulator in its report said there were some further aspects which needed to be examined on the role of Mehta which would be prepared separately and the action of the big bull and his front entitieswould be taken separately.On the alleged role of promoters of these three scrips, there were certain aspects which need to be examined as also the role of exchanges and lapses if any of the surveillance mechanism would be examined in a separate report, SEBI said. SEBI's investigations reveal that over 70 per cent of the traded stocks of these securities were accumulated in a phased manner which also reflected on their prices.``It is has been established through the investigation that these entities including the set of brokers in concert and connivance have been responsible for the manipulation of these scrips,'' Singhvi said. While in the case of BPL the traded securities reported on the exchange stood at 55 lakh shares, about 30-35 lakh shares were cornered by these brokers.Similarly, in the case of Videocon International and Sterlite about 40-50 per cent traded and deliverable volumes were cornered by these entities. On the BSE, these intermediaries mainly resorted to the carry forward mechanismto accumulate these stocks over a period of 5-9 carry forward sessions.Reflecting the concerted and phased attempts made by these entities to rig up the prices of these stocks, BPL moved from a low of Rs 100-180 registered during the period between January to March 1998 to a high of Rs 445 on June 4. Interestingly, the stock crashed to a low of Rs 109 leaving the bulls completed trapped on account of heavy unloading.In the case of Videocon International, where the price manipulators aptly used the stories on 2 per cent creeping acquisition by the promoters to jack up the price from a low of Rs 25 in January, 1998 to Rs 168 on June 4.The stock ultimately came crashing to a low of Rs 43 on July 2.Sterlite Industries, which was also traded at the lowest ebb of Rs 162 in February 1998, touched a high of Rs 385 in May. However, the post budget phase saw Sterlite register a 60 per cent erosion in its market value to trade at a low of Rs 155 on June 23.
