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Sebi launches probe into 700 scrips

P Vaidyanathan Iyer

The Securities and Exchange Board of India has launched a probe into the stock prices of 700-odd companies which had witnessed similar-if not higher-price spurts as the K-10 scrips.

According to sources, the capital market regulator despatched a letter to all the stock exchanges on October 3, asking them to verify if price movements in the 700 scrips were in line with the general trend in the scrips' price movement.

A top Sebi official said: "We did not launch an investigation earlier since the market was in doldrums and any such action would have further depressed sentiments."

With the regulator scheduled to appear before the committee in the next 10 days, Sebi has decided to seek the inputs from the bourses themselves, he added.

The latest move by Sebi follows a directive from the Joint Parliamentary Committee probing the irregularities in the stock market. JPC sources said the main intention of the directive was to check if there have been malpractices in these stocks too.

The sources added that a section of the committee had revealed that prices of over 125 companies spurted by over 500 per cent during the bull run in 1999-2000.

"The committee wants to know if such heavy increases in prices of these scrips were fair," they said.

The comprehensive list of scrip-wise percentage increase in prices during 1999-2000 of these 727 scrips, along with their prices in the latest trading day shows that at least 50 companies recorded a spurt of 1,000 per cent or more during 1999-2000.

For instance, Mascon Global, which was quoting at Rs 17.75 in the Bombay Stock Exchange during 1999, jumped over 6,000 per cent in the bull run.

Vision Tech, another lesser known scrip, spurted by over 7,500 per cent in BSE. Other companies in the top 50 list include DSQ Biotech, Odyssey Technologies, Hinduja Finance, Catvision and Aftek Info.

The entire list of 727 companies is of stocks which witnessed share price increase of 100 per cent or more as in April 2000, compared to the previous year. Prices of over 80 companies, as in April last year, jumped by 500 per cent or more.

JPC sources said the market regulator could have done this exercise on its own before looking at only a few scrips which witnessed sharp increase in prices.

"The scrips in which Ketan Parekh is alleged to have operated are the only ones which Sebi looked at," they said, adding that the trend indicated there was much more to the scam than just a dozen odd companies and Ketan Parekh.

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