Angel Broking penalised, no new clients for two weeks

MUMBAI Wed Jan 30, 2013 8:01pm IST

An investor watches the share index at a local share and stock market in Chandigarh June 18, 2012. REUTERS/Ajay Verma/Files

An investor watches the share index at a local share and stock market in Chandigarh June 18, 2012.

Credit: Reuters/Ajay Verma/Files

Stocks

   
Rajalakshmi (C), 28, smiles after winning the Miss Wheelchair India beauty pageant in Mumbai November 26, 2014. REUTERS/Danish Siddiqui

Miss Wheelchair India

Seven women from across India participated in the country's second wheelchair beauty pageant, which aims to open doors for the wheelchair-bound in modelling, film and television, according to organisers  Slideshow 

MUMBAI (Reuters) - The SEBI has barred Angel Broking from taking on new customers for two weeks and set penalties on three other small brokerages for artificially boosting trading volumes in shares of a software developer more than a decade ago.

The Securities and Exchange Board of India (SEBI) accused Angel Broking of working in tandem with the three other brokerages to generate the bulk of trading activity in shares of Sun Infoways Ltd (SUNI.BO) from February 5 to March 2 in 2001.

Shares of Sun traded in the range of 342 to 296 rupees during that period, after which shares slumped to as low as 60.75 rupees on April 30, 2001, while trading volumes "reduced drastically," the SEBI said on Wednesday.

The artificial pumping of trading volumes to generate interest from other investors and push up share prices is widely referred to as "circular trading" in India.

SEBI rejected Angel Broking's response that it had acted "purely as a stock broker" for a client. Angel Broking had also stated there was "no evidence on record" it had acted as part of a group in collusion with one other, according to the regulator's statement.

"The occurrence of such synchronized deals in a circular manner persistently cannot be said to be a co-incidence as the shares were being rotated intra-day within a closed group and there was no change in the beneficial ownership of the shares," SEBI said.

The regulator said such a pattern of deals created a false impression of active trading in the shares.

SEBI barred Angel Broking from taking on new customers for two weeks starting 21 days after its statement on Wednesday. Allwin Securities Ltd and Bharti Thakkar India Securities Pvt Ltd also received the same penalty.

In addition, SEBI suspended the certificate of registration for brokerage N.C. Jain for one week.

"Management is looking into the matter and a suitable action would be taken soon," a spokeswoman at Angel Broking said when contacted by Reuters.

Officials from Allwin, Bharti Thakkar and N.C. Jain were not immediately reachable.

(Reporting by Rafael Nam. Editing by Jane Merriman)

SAARC Summit

REUTERS SHOWCASE

E-Commerce Boom

E-Commerce Boom

Online grocers come up trumps in India's e-commerce boom   Full Article 

Reuters Poll

Reuters Poll

GDP growth to slow to 5.1 pct, but no rate cut yet  Full Article 

Oil Prices Fall

Oil Prices Fall

Oil at four-year low as OPEC production cut looks unlikely  Full Article 

Hughes Dies

Hughes Dies

Australia batsman Hughes passes away aged 25  Full Article 

Google in Europe

Google in Europe

Insight - Behind Google's Europe woes, American accents  Full Article 

India-focused Funds

India-focused Funds

India-focused hedge funds up over 40 pct YTD - HFR  Full Article 

Trade Deal

Trade Deal

WTO postpones trade deal by a day after last-minute objection.  Full Article 

Land Disputes

Land Disputes

Disputes over land for industry on the rise in India, angering locals - charities  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage