Two entities fail to make prima facie case to revoke ban: Sebi

Says investigation is going on and appropriate decision will be taken after completion of the probe

The Securities and Exchange Board of India (Sebi) today said the restraining order on two entities, related to plunge in some mid-cap stocks in July, would continue since the parties were unable to make a "prima facie case" to revoke restrictions on them in accessing the securities market.

The market regulator's order came on plea by Umnag Nemani and Cheminare Trade Comm, where he is a director. Both are among the 19 entities barred by Sebi in August from the securities market, following an initial probe into the steep decline in share prices of some mid-cap stocks in July.

"...Submissions of Nemani and Cheminare do not give any plausible reason/explanation, at this stage, for their trades in the respective scrips as alleged in the interim order.

"Thus, they have not been able to make out a prima facie case for revocation or modification of the interim order as against them and the material available on record justifies the continuation of the directions passed against them under the ad interim ex-parte order dated August 3, 2012," the Sebi said.

The market watchdog also noted that investigation in the matter is going on and an appropriate decision, in accordance with law, would be taken after completion of the probe.

Sebi is probing the sharp plunge of 20-26% in the shares of mid-cap companies -- Parsvnath Developers, Pipavav Defence and Offshore Engineering, Tulip Telecom and Glodyne Technoserve -- at the BSE and NSE on July 26.

These stocks had seen sharp intra-day movements in both price as well as volume on that day, even though no major announcements or price sensitive information was disclosed to the exchanges by these companies in the previous 15 days.

Rejecting the plea, Sebi Whole Time Member Rajiv Kumar Agarwal said, "I am of the considered view that no intervention is called for, at this stage, in either vacating the interim  directions or modifying it, with respect to Umang Nemani and Cheminare Trade Comm Pvt Ltd."