After promptly initiating action against manipulators of 20 'penny stocks', market regulator Sebi is now investigating 68 more stocks of small companies to find if anything was wrong in their trading, leading to astronomical rise in the scrip prices till September."We took action against 10-20 companies immediately after evidence was found against them while about 68 more stocks were referred for further investigation," said R Ravichandran, officer-on-special duty in SEBI.
If found guilty, manipulators face a penalty of Rs 25 crore (Rs 250 million) or three times the value of the damage done by the company.
Sebi, which intensified market surveillance in September, analysed 900-1,000 penny stocks for unusual movement in share prices during a short span of time.
Pointing to the unusual price movements irrespective of improvement in financial performance, Ravichandran said in one such case there was 6,000 per cent increase in price and volume.
After finding evidence, SEBI has barred promoters and directors of penny stock companies like Minal Engineering, IFSL Ltd, Ind Tra Deco Ltd, Mega Corporation Ltd [Get Quote], Konkan Tyres Ltd [Get Quote] (KTL) and Prime Property Development Corporation [Get Quote] from further trading in shares.
The market regulator had also barred scores of brokers from dealing in the securities market or with securities of certain companies.
Taking advantage of the market boom, some of the unscrupulous brokers and promoters had rigged share prices.
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