SEBI, the market regulator has banned 19 entities from the securities market due to downward movement in some mid-cap stocks. It has prohibited them from accessing the securities market and barred them from buying, selling and dealing in securities until further order. The major stocks include, Parsvnath Developers, Pipavav Defence and Offshore Engineering, Tulip Telecom and Glodyne Technoserve which showed 20% -26% downward trend. This downward movement was seen in both BSE and NSE and there were no price sensitive disclosures to the stock exchanges during 15 days prior to the fall on July 26.
The other entities are 4a Financials Securities, A to Z Steels, Ajit Kumar Jain, Cheminare Trade Comm, G N Credits, Gajria Jayna Precision Industries, Kuvam Plast, Littlestar Vanijya, Manish Agarwal, Milestone Shares & Stock Broking., Neelanchal Mercantile, North Eastern Publishing & Advertising Co, Passions System Solution, Premium Hospitality Services, Ramkripa Securities, Umang Nemani, Venus Infosoft, White Horse Trading Co and Yashika Holding.
These entities were under observation for the past six months. Investigation also exposed several doubtful features in transactions. SEBI will conduct a detailed investigation to find out if all the disclosures made by the companies are proper and hopes to complete the inquiry soon.
The market regulator analyzed the activity of major clients on the basis of net sell at NSE and BSE on July 26, 2012 (during the price fall period) in aforesaid scrips and observed that some of these clients were not only common across the above scrips but they also traded on both the exchanges, violating section 12A of the Securities and Exchange Board of India Act, 1992.