Search the Internet          Tips  Sites: Finance, Investment

KP struck illegal deals in five scrips: Sebi

Rakesh P Sharma & Sangita Shah

The Securities & Exchange Board of India has found that Ketan Parekh and Triumph International Finance (India) had indulged in illegal synchronised deals in the Adani Exports, HFCL, Tips Industries, Zee Telefilms and Lupin Laboratories Ltd counters.

In an order dated 16 May on the case of TIFIL, Sebi has stated that 32 instances of synchronised transactions took place in shares of Adani Exports between 14-2-01 and 22-2-01.

The time gap between buy order and sell order was sometimes nil and sometimes varied between 1-30 seconds. In almost all cases, LIPL, one of the Ketan Parekh companies, was the selling client and CCL (Classis Credit) was the buying client.

In the case of HFCL, 18 instances of synchronised deals took place on February 22, 2001. The time gap between buy and sell order varied from one to ten seconds, Sebi noted. There were two such instances in the case of Tips Industries and Zee Telefilms, Sebi said.

"TIFIL admitted to have entered into these transactions and stated that these transactions are not illegal but negotiated deals and are not banned. I do not agree with this argument of TIFIL," Sebi chairman said in the order in para 10.6.1.

Further Sebi has stated that it is defying the theory of probability that, in such a highly active market, every time these clients have matching trades as they desired.

It is further noticed that some of the above cross deals were put between two clients of TIFIL through different terminals but placed in the same room. This was an attempt to circumvent the circulars of Sebi on "negotiated deals". The buy and sell orders were put at exactly the same time, Sebi has stated.

"This is a misuse of the system by TIFIL. It is the professional duty of a broker to discourage clients from indulging in such trades. TIFIL failed to stand up to this professional expectation also, leave alone the code of conduct," Sebi chairman has stated.

"I agree with the enquiry officer that TIFIL indulged in synchronised deals, which are not as per stipulated norms in the circular dated 14-9-99," para 10.6.3 of the order states.

Powered by

ALSO READ:
The Rediff Budget Special
The Rediff-Business Standard Special
Money