Rigging Plaints Tapered In 1997-98, Says Sebi Report

The number of complaints received by the Securities and Exchange Board of India (Sebi), with regard to price rigging and circular trading among others, have come down drastically to 53 during 1997-98 from as high as 122 during 1996-97, according to the Sebi annual report.

The number of cases taken up in 1997-98 was down to 53 from 122 in 1996-97. However, the number of cases completed touched 46, down from 55 from 1996-97, thus improving the ratio of cases taken up to those completed in 1997-98.

A break up of the nature of investigations launched by Sebi shows that the market regulator has received 29 cases of market manipulation and price rigging, 14 cases for "issue" related to manipulation, five for insider trading and three for takeovers.

During 1997-98, on completion of investigations, enquiry proceedings were started in respect of 52 intermediaries who have been issued showcause notices under the provisions of the relevant regulations.

Sebi has launched enquiries against 34 stock brokers during the same period, probes against seven merchant bankers and nine against registrars to an issue.

The market regulator has also initiated adjudications proceedings in seven cases. In 13 cases, the adjudication was completed which included cases relating to violation of the Sebi takeover regulations.

Action was taken in 75 different cases in 1997-98. Of this, 39 cases resulted in the suspension of the intermediaries and the registration of intermediaries was cancelled. In addition, 9 intermediaries were given given warnings by the markets watchdog, issue proceeds were refunded in three cases and prohibitive action was taken against 10 non-intermediaries under section 11B of the Sebi Act. The markets watchdog also initiated prosecution proceedings in 11 cases in 1997-98 involving 81 persons bringing the total prosecution proceedings initiated so far to 29 involving 191 persons in the last three years.

Out of these, 24 prosecutions were initiated under the powers delegated to Sebi under the Companies Act. Three prosecution proceedings were also initiated for violations of the Sebi takeover regulations, 1995 while two more were launched under the fraudulent and unfair trade practices regime.

In terms of civil litigation, 137 cases were filed where Sebi was made a party. Of this, 20 involved primary market cases, 56 cases involved secondary market department; 17 involved the investigations and surveillance department; eight involved the mutual funds, and the consumer fourm cases amounted to 31.