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Sterlite, Videocon, BPL to challenge Sebi order

Sterlite, Videocon and BPL said on Friday that they would challenge the Securities and Exchange Board of India order banning them from accessing capital market on charges of price manipulation and denied any links with prime accused Harshad Mehta who was permanently debarred from the market by the regulator.

"We deny all the charges. We are going to appeal against the Sebi order at the appellate tribunal on Monday," chairman of Videocon International V N Dhoot said.

Echoing these sentiments, Sterlite Industry's finance director Tarun Jain said: "We will appeal against the order next week. We have no relation, no contact and no deals with Harshad Mehta."

The markets regulator had on Thursday barred BPL for 4 years, Videocon for 3 years and Sterlite for 2 years from entering the capital market to raise resources and ordered prosecution of their directors on the issue of price manipulation.

BPL's company secretary Raja Ram said from Bangalore: "The Sebi order, as made known through the press, in the opinion of BPL's Counsel, is unsustainable in law. The threatened prosecution of directors without an opportunity of hearing is bad and against all norms of justice."

Categorically denying any association with Harshad Mehta or his companies, Ram said in a statement: "Sebi, the regulatory authority, now in the midst of a raging controversy as regards its powers has exercised authority that is not lawfully vested with it, that too after a period of three years."

Sebi had said that investigations in connection with the 1998 price manipulation had shown that a set of brokers and sub-brokers, acting on behalf of a common set of clients, acting as a front for Mehta cornered a large chunk of shares of these three scrips, leading to price manipulation.

Questioning the verdict Sterlite Industries said that it was being punished for helping BSE authorities to avert a payment crisis.

"The whole matter relates to purchase of 600,000 shares at the request of BSE authorities. The authorities approached the company in June 1998 to acquire share of the company so that a major payment crisis in the BSE could be averted. We fail to understand how this one transaction could be construed as manipulation of share prices. These shares were acquired under the creeping regulations by the Madras Aluminium Company," it said in a statement.

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