Street talk: A duplicate Rakesh Jhunjhunwala in the making

A new Jhunjhunwala who emerged last week has run amok in a stock called Surana Solar.

A couple of years ago, a blog, which went by the name 'The secret journal of Rakesh Jhunjhunwala', was making waves online.

Eventually, the duplicate was tracked down, but the big bull himself did not initiate any punitive action and the blog and twitter handle have continued, though with sufficient disclosures about these being parody accounts.

But, a new duplicate Jhunjhunwala who emerged last week has run amok in a stock called Surana Solar.

According to Street talk, there was some day-trading activity in the stock by 'Rakesh JhunJhunwala' on June 8 itself.

While the Street did not pick it up then, it jumped in when the same trade was repeated on June 9, hoisting the stock to over Rs 60 levels, a gain of around 10 per cent.

The next day, CNBC TV 18 reported that the 'Jhunjhunwala' who bought the Surana Solar shares was different from the billionaire investor.

The stock tanked soon after and the sheep which blindly followed what they thought was the 'big bull' were caught in the trap.

The Securities and Exchange Board of India (Sebi) has since stepped in and directed exchanges to withhold settlement on select trades on June 10 and 11.

Dhaval Dave, the chief executive of Rajkot-based Sun Flower Broking, which had opened the demat account for the Kolkata-based duplicate, said: "Everything is regular. Proper KYC (know your customer) was done and the PAN card was verified."

When asked if the J-name did not raise suspicion, Dave said: "Naam toh kisi ka bhi ho sakta na (anyone can have the same name)."

Dave said the account was one-and-a-half to two months old and that after he got calls from "TV people" about some problems with the trade, they immediately squared it off.

He declined to share the contact details of the client.

Dave said it was now up to the exchange and regulator to take a call on what should be done with the account. "We cannot guide them.

They have to decide." The incident is similar to the manipulation executed in the Pyramid Saimira scrip some years ago by floating a forged Sebi letter."

The stock zoomed initially but tanked after Sebi clarified it had not issued any such letter.

Sebi used cell phone tower details to establish the meetings between key players in the conspiracy in that landmark investigation.

Some lost their careers, some went to jail and others got banished from the market. However, the Surana Solar case seems a bit more complicated.

If the Jhunjhunwala of Kolkata established his credentials and the broker had evidence to prove that KYC was done properly and there was no problem with the records, who will the regulators train the guns on?

There are some murmurs already on the Street claiming the trades were legitimate.

However, the exchange and the regulator have sophisticated surveillance tools and information at their disposal, which they can utilise to establish a mala fide intent, if any, and/ or some kind of connection between the entities that traded in the stock last week.

In addition to these, the incident also calls for improvement in the quality of disclosures.

There is hardly any consistency in the way names are reported in public disclosures.

For example, the real Jhunjhunwala's name itself is reported by different companies in different manner. Some say Jhunjhunwala R, others say Rakesh - Rare and some others spell out the full name.

Such inconsistency can be addressed if a standard format is prescribed and followed. After the crores lost in the Surana stock, now no one can ignore this issue by saying 'What's in a name?'.

Photograph: Reuben NV/Rediff.com