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First Global indulged in circular trading: Sebi report

Janaki Krishnan

First Global indulged in circular trading across various bourses to manipulate six scrips' prices, says the Securities and Exchange Board of India's preliminary investigation report.

According to the report, First Global indulged in circular trading to bring down prices of six scrips, including Zee Telefilms, Himachal Futuristic, Global Tele and SSI Ltd.

This is the first instance when the Sebi has found evidence of an alleged bear cartel operation through circular trading.

According to the Sebi officials, the report is based on transactions details submitted by First Global and other sources of information. "We have had to collate, collect and interpret the information," they said.

However, Shankar Sharma of First Global refuted the allegations and said they were simply arbitrage transactions across exchanges.

Interestingly, the Sebi report also links First Global to the Tehelka episode. Just a day before the breaking out of Tehelka scandal, First Global offloaded a huge quantity of stock in the market which suggest that it had prior knowledge of the event, the report says.

According to the report, First Global conducted circular trading transactions through one of its registered sub-broker Bang Securities. Transactions worth around Rs 6 billion were conducted through Bang Securities during the crucial days of March when the market was going down.

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