Second Part Of Sebi Probe To Target The Big Fish

Sebi has kept the finance ministry in the picture since the ministry was concerned about the instances of bear hammering and the steep fall in the stock prices late last year, and the generally depressed conditions now. On Monday, based on the first report, Sebi cracked down hard on illegal badla and short sales countrywide, slapping show cause notices on 33 brokers, and issuing a show cause to the entire governing board of the Pune Stock Exchange where it all originated. Six of the brokers were governing board members of Pune and Calcutta stock exchanges.

The bear hammering probe is, however, intrinsically linked to the badla probe as well. In fact, it was during the bear hammering probe itself late last year that the Sebi investigating officers stumbled into the aspect of illegal carryforward operations. Such was the magnitude of the illegal badla operations that Sebi decided to crack down sharply and finish a separate report on that aspect itself. This became the first report on the probe, and Sebi decided that to comprehensively trap the bear cartel, further probing was necessary, which is now on.

 

For the second part of the probe, establishing mere short selling is not enough. More client accounts will have to be looked at, and a nexus between them established. Besides, it has to be proved that the motive was to deliberately depress the market,