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

   
Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

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)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

RAINFALL THIS YEAR

REUTERS SHOWCASE

Election 2014

Election 2014

Thousands mob Modi as election race starts in Varanasi.  Full Article 

Monsoon Forecast

Monsoon Forecast

Met office rules out surplus monsoon in 2014.  Full Article 

Facebook's Performance

Facebook's Performance

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

Earnings Season

Earnings Season

Bharti Infratel Q4 net profit jumps 64 percent.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

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