Sebi finds evidence of market rigging by Rathi
New Delhi: Sebi says certain transcripts based on former BSE president Anand Rathi’s queries from the stock exchange may be prima facie evidence that the former BSE president made large-scale deals in the stockmarket and might have been involved in manipulation of the market and insider trading.
Sebi passed a 13-page order last week, which states that on the basis of the "material available at this stage, it cannot be ruled out that Rathi was involved in market manipulations."
The order was passed after a personal hearing was given to Rathi by four members of the Sebi board comprising chairman D R Mehta, chief economic advisor, finance ministry, Rakesh Mohan, RBI deputy governor S P Talwar and Sebi member J R Varma.
What could be damaging for Rathi is that the order says that seeking price sensitive information may have been commonplace in the exchange and that Rathi may have been habitually doing it.

The order says that, "The (ex-BSE) president appeared to be keen on seeking information regarding transactions by certain persons in certain scrips. If he were so concerned with the movement of the scrip, he would have asked for an analysis, a report of significant movement or abnormal movements of the index, etc. The questions posed by the president appear to be questions of a person interested in having specific information of sales by certain market players and institutions in certain scrips."

It notes that Rathi was in the habit of seeking price-sensitive information: "The second transcript shows that according to the officials of the BSE themselves, Rathi tried to get this information repeatedly on several occasions. There was no question of hearsay in this case since what the officials would say would constitute confirmation of Mr Rathi’s conversation with them."
The order observes that the information that Rathi sought enabled him to take advantage of the market at the expense of the ordinary investors.
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Ranbaxy scrip falls
Mumbai: The Ranbaxy Laboratories’ scrip fell sharply on Friday on the Bombay Stock Exchange (BSE) following market rumours, that its subsidiary company, Vidyut Investment, had lost a significant sum in vyaj badla.
Market estimates suggest that the loss could run into several crore.
Vidyut Investment has sold a chunk of Global Trust Bank shares to three investment outfits controlled by the Nirma group. A Ketan Parekh firm, Triumph International, apparently brokered the share transfer from Vidyut to the Nirma companies.

The Ranbaxy scrip, which opened at Rs 576.45 on the BSE, touched a high of Rs 590, but closed significantly lower at Rs 510. The scrip then touched a low of Rs 498 during the day. The stock closed 11 per cent lower even as volumes at the counter stood at 2.57 lakhs.

Analysts say that the stock could face more rough weather, until its alleged links in the current fiasco are proved wrong.

However, there was no official statement could from Ranbaxy on the issue.
As of December 31, 1999, Ranbaxy Laboratories held 25,008,400 equity shares of Rs 10 each (or 100 per cent) in Vidyut Investment. Vidyut registered a profit of Rs 1.62 million for year ended December 31, 1999 as against Rs 16.38 million in the previous financial year.
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Sensex gains 11 points on lacklustre day
Mumbai: Following a sharp rise in the stock price in the US markets another black Friday was averted. But profit-booking amidst various rumours related to the current stock market crisis restricted the gains.
The market opened on a firm note in the morning following the strong rally at NYSE and Nasdaq with both the Dow Jones Industrial Average (DJIA) and Nasdaq Composite Index recording handsome gains on Thursday night. Nasdaq was up 148 points and the DJIA went up by 402 points.
Almost as if taking a cue from this, the Sensex opened sharply higher at the Bombay Stock Exchange (BSE) by almost 100 points at 3663.74 points and reached an intra-day high of 3676.82 points. But profit taking during the day led the stock prices to fall with the Sensex closing at 3576 points, against Wednesday’s close of 3565.65 points, a marginal gain of 10.35 points. At the National Stock Exchange (NSE), the S&P CNX Nifty closed at 1134.65 points, down 2 points against Wednesday’s close of 1136.65 points.

But the major stocks affected during the day were from the pharma sector following news that an investment company associated with Ranbaxy Labratories sold a chunk of Global Trust Bank shares to three investments companies controlled by the Nirma group. Other stocks that were affected included: Dr Reddy’s Laboratories, down by almost 10 per cent, and Lupin Laboratories, down by 11 per cent. Among the new economy stocks, NIIT and HFCL were among the major losers, down 11.95 per cent and 7.55 per cent respectively. Infosys Technologies gained 2.45 per cent following the news that the company board would meet on April 11 to increase the FII limit to 49 per cent. Zee Telefilms went up by 5.52 per cent to close the day at Rs 134.75. The other major gainers for the day were Grasim and Telco, which went up by 5.39 and 4.89 per cent to close the day at Rs 270.80 and Rs 64.40 respectively.
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