 "Sebi probe of Castex finds no evidence of manipulation")
The Securities and Exchange Board of India (Sebi), which is probing unusual movements this year in the shares of Castex Technologies, said it hadn't yet found any signs of wrongdoing.
Some holders of Castex's convertible bonds complained to the Sebi in September, alleging manipulation of its shares with an aim to inflate the price and trigger conditions for a mandatory conversion of the debt. After surging almost five per cent in 12 of the 16 sessions through July 13 to a record nearly Rs 362, the stock slumped by the daily five per cent limit in the subsequent 42 days.
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"We have not found any instance of market manipulation or unfair trading practices so far," Sebi Chairman U K Sinha said in an interview. "If we find any evidence, they will not be spared."
Castex's share price tripled since the end of March until reaching the threshold that triggered the mandatory conversion. In September, the company decided to convert $137.4 million of foreign-currency debt outstanding into equities. The shares have fallen 94 per cent since July 14.
John Flintham, senior managing director of Amtek Auto Ltd, a group company of Castex, said on September 11, he had no knowledge of any stock-price manipulation.
Many investors have suffered significant losses "because the price of the shares remained unnaturally high only for (exactly) as long as long was required to give the company the opportunity to purport to exercise its conversion rights," Quinn Emanuel Urquhart & Sullivan UK, a law firm representing the bondholders, wrote in a letter dated September 7 to the Sebi chief.
"We have received a number of complaints on the issue," Sinha said in Mumbai. "We have informed them that we are investigating this."
