The Securities and Exchange Board of India is inspecting the records of three securities firms to see whether there was any violation of the KYC (Know your client) norms. The three firms were Indiabulls Financial Services, India Infoline and Fortis Securities, said Sebi sources.
Sebi has taken a tough stance on several broking firms following a huge spurt in prices of quite a few penny stocks in the recent past.
In the past one month, Sebi has passed orders against seven penny stocks banning the promoters, directors and brokers who contributed to significant proportion of the turnover in those stocks to deal in the shares of respective companies.
Sebi sources said Indiabulls, India Infoline and Fortis had contributed significantly to the turnover in some of the penny stocks which seemed to have witnessed price manipulation.
When contacted, Gagan Banga, executive director of Indiabulls, said Sebi's move was part of a routine inspection. Indiabulls had clarified yesterday that for the first six months of the current financial year, the trading volume of Indiabulls Securities Ltd on behalf of its clients in the Z, S and trade-to-trade category stocks is 1.80 per cent of the total trading volumes of the company in capital markets.
The trading volume of Indiabulls Securities on behalf of its clients in B2 category stocks was 1.51 per cent of total trading volumes, said the company. Sachin Nath, head of strategy at Fortis Securities, denied that there was any inspection by Sebi.
Harshad Apte, head of Investor Relations at IndiaInfoline, said this was part of a routine inspection and 'in the normal course of business.'
Apte said the trading volume of Fortis on behalf of its clients in the Z-category stocks is 1.87 per cent of the total trading volumes of the company in the capital markets.