Sebi restrains three traders for NCL rigging

The Securities and Exchange Board of India (Sebi) today restrained trader Deven Patel, Tejas Patel and Smitaben N Shah from buying, selling or dealing in securities market for three years for their involvement in the price rigging of initial public offer of Nissan Copper Ltd (NCL).

The order passed by Sebi full-time member M S Sahoo also directed impounding of unlawful gains to the tune of over Rs 2.36 crore. Sahoo directed the stock exchanges to withhold profits made by the three traders from their irregular trades executed in the shares of NCL on December 29, 2006 and January 2, 2007.

Sebi today said the three were found to have violated the provision of regulation 3 (a) and (c) of Sebi’s (Prohibition of Unfair Trade Practices Relating to Securities Market). Sebi, during its investigations into the unusual price rise in the shares of Nissan Copper on the day of its listing in December 2006, had found several entities involved in irregular trading in the scrip and had debarred them from dealing in the securities market through an interim order of January 17, 2007.

The investigations prima facie found that some applicants under the QIB (qualified institutional buyers) quota intended to exit NCL on the first day of listing for which buying support was given through structured transaction on a pre-arrangement between the counter parties.