Sebi report pins blame on short sellers
New Delhi: The report on the inquiry into the stock market crash post-budget, has concluded that the worst ever crisis at the stock markets has been brought about by short sellers taking advantage of the unwinding of bull positions by operators.

The investigation carried out by the surveillance and investigations wing of Securities and Exchanges Board of India (Sebi) states that key short sellers like Shankar Sharma, Nirmal Bang and RS Damani had a major role in triggering the market fall. The report says that liquidation of long positions was an important reason for the drastic fall in the markets.

The role of these three market persons is a significant component of the report, which has met the April 15 deadline set by the finance minister. The report further states that FII brokerage firm, CS First Boston has also played a crucial role in the whole process by funding the market players named in the report.

The report also highlights the role played by key bull operator, Ketan Parekh, who is now in CBI custody, for his misuse of the banking system and channelising the banking funds into the stock market. The report also zeroes in on some transactions in which Ketan Parekh is understood to have received funding from Zee and HFCL, although both entities have vehemently denied any such advances to the broker.

The Sebi report has constructed a very important link between banks, corporates and brokers among whom funds were going back and forth to be used in the market.
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