Round one to IndiaBulls as SEBI suspends its own order in IPO scam

In a curious turn of events, SEBI has decided to keep its order in abeyance, issued against stock broking firm IndiaBulls for its alleged involvement in the IPO scam.

The SEBI communication issued this afternoon says the ad interim order issued yesterday 'would be kept in abeyance subject to verification of clients and until further directions, in so far as IndiaBulls Securities Limited is concerned.'

In yesterday's order, SEBI had classified IndiaBulls as a key operator in the scam who received 13,939 shares of TCS from 559 different demat accounts. The order barred the company from dealing in the security markets, which was subsequently modified as applicable only to proprietary trades.

Today morning, IndiaBulls management led by Sameer Gehlaut made a representation to G Anantharaman, whole time member of SEBI who issued the order, and reportedly submitted documentary evidence supporting its claim that the transfer of TCS shares were from genuine client accounts.

The SEBI circular says the decision to keep the order in abeyance was taken "on the basis of oral and written submissions made by IndiaBulls Securities and having regard to the balance of convenience in the materiality of circumstances of the case."

A communication from the company to the stock exchanges said "IndiaBulls Securities Ltd or any of its group companies had absolutely no role in either the IPO application of these 559 clients or any economic interest or any other interest whatsoever in the sale proceeds arising out of the sale of 13,939 shares or any financing of any of the IPO applications of the 559 clients. These 559 clients are based out of 81 different cities in India."