SAT asks Sebi to pass order on Alka in 4 mths in GDR case

The Securities Appellate Tribunal has asked Sebi to pass an order against Alka India Ltd within four months in a case related to capital market manipulation using Global Depository Receipts (GDR) issues.
After receiving alerts about large scale off-market transactions in shares of some firms, Sebi had found that certain FIIs/Sub-Accounts were converting the GDRs - financial instrument used for raising capital overseas - into equity shares and selling them in the Indian market.
In 2011, Securities and Exchange Board of India had through an interim order barred Alka India from accessing the capital market for acting as a 'counterparty to the sell transactions of the FIIs' and thereby being a part of the market manipulation.

In April 2012, Sebi modified the order to the extent that Alka India was allowed to sell its securities held in dematerialised accounts.
It approached the tribunal against the Sebi rulings.
In its submission to SAT, Sebi had stated that the investigation in the case was nearing completion, and it would initiate adjudication proceedings and pass an appropriate order within four months.

The tribunal noted that it had been more than 18 months since Sebi passed an interim order against Alka India.
Accordingly, it ruled that "we accept statement made by counsel for Sebi and direct Sebi to initiate adjudication proceedings and pass appropriate order thereon within a period of 4 months from today qua the appellant (Alka India)".

Sebi had in 2009-10 received alerts regarding large scale off-market transactions in its IMSS system in shares of IKF Technologies, Cat Technologies, Avon Corporation, Asahi Infrastructure and K Sera Sera.
The prima facie findings of Sebi had pointed out to an elaborate scheme to manipulate the securities market.