Gelli's role in BoM case suspect says Sebi
Mumbai: Sebi is investigating the role of Ramesh Gelli, former GTB chief, in the controversial share transaction between the diamond trading firm owned by B Arun Kumar & Co and the Spic Group in the Bank of Madura scrip on December 6.

The transaction is under scrutiny because of charges of insider trading on the Bank of Madura scrip two days prior to the announcement of its merger with ICICI Bank.

Muthiah of Spic was on the board of Global Trust Bank till December 2000. It was at this time when the deal was stuck and thus Gelli knew him.

It was reported at the time that Muthiah had lost a lot of money in the transaction and had stepped down from the board of GTB in December, although the two events cannot be linked.
B Arun Kumar & Co is also a client of GTB.
Sebi felt that the entire transaction was in the nature of a negotiated deal, which was banned by Sebi.

However it is said that the transaction was not completed as the Spic group declined to give delivery of a part of the shares after it got to know that it had been let down by the buyer.

About three years ago the Spic group made an aborted bid for Bank of Madura. The deal failed and the Spic group was saddled with the shares of Bank of Madura, which it wanted to sell.
On December 6 last year, B Arun Kumar bought a 5 lakh shares of Bank of Madura of a total of 5.9 lakh shares traded on the Bombay Stock Exchange that day.

The shares sold accounted for a little over 4 per cent equity of BoM. This is all that the Spic group owned in the bank.

The regulator is now trying to determine if the purchase of shares by the diamond trader was influenced by prior information of the merger of BoM with ICICI Bank in order to establish a case of insider trading.
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