Securities and Exchange Board of India (Sebi) enquiry officer Piyush Gupta, who is probing the Anand Rathi case, has recommended a two-year ban on former president of the Bombay Stock Exchange (BSE) Anand Rathi trading in the capital market, but has absolved Rathi of all allegations of insider trading.
Rathi's three broking outfits -- Anand Rathi Securities, Rathi Capital and Rathi Global Finance - have also been banned for nine months effective ftom March 12, 2001, according to the recommendations.
However, an associate firm -- Navratan Capital and Securities Pvt Ltd -- has been cleared of all charges. It is understood that Anand Rathi is planning to appeal against the order. When contacted, Raathi refused to comment on the enquiry officer's findings, saying the matter was still under review.
Gupta's recommendations state that there is no evidence to suggest that Rathi was in any way guilty of insider trading. He's been banned from operating in the market largely on the ground that he violated the code of conduct of the Stock Brokers Regulations, in soliciting price sensitive information from the exchange's surveillance department.
In the case of Navratan Capital, the enquiry officer has said that since the firm is owned by Pradeep Gupta -- Rathi's son-in-law -- it does not have anyhting to do with the Rathi group as such and is exonerated of all charges.
The final decision on these recommendations will be taken by the Sebi after Rathi replies to a show cause notice. The notice was served on him last week and Rathi has three weeks to answer.
The board is expected to meet in 15 days after getting the reply from Rathi to pass its final order, Sebi officials said. Rathi would also be given the opportunity to appear in front of the board and present his case.
