Sebi to review practice of giving guidance
Mumbai: Stock market regulator Sebi is likely to review the industry practice of giving revenue guidance and changes in procedures related to dividend payout and will come out with norms for oil and gas firms to make adequate disclosures.

Sebi chairman M Damodaran said guidance comprised bread and butter of analysts and resulted in building up of Street expectations. Responding to various queries posed by industry captains at the meeting, Damodaran indicated Sebi was contemplating many changes and work was in progress to give effect to them.

He also said Sebi was contemplating changes with regard to the practice of declaring dividends on a percentage basis, easing the procedure for issue of shares on rights basis and introduction of different classes of shares instead of focussing only on equity shares. He said Sebi was also working on norms for oil and gas companies such as the timing of their announcement of new discoveries.
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Dedicated MFs to be launched for investing in overseas markets
New Delhi: Mutual funds may now be able to offer investment options to retail investors through a fund dedicated to investing abroad. Such a fund may not be subject to the $150-million ceiling as long as it is strictly restricted to overseas instruments (both debt and equity) only.

While the overall cap of $4 billion for the mutual fund industry will continue, these dedicated funds may not be subject to this annual ceiling.

In case a mutual fund offers a scheme to its investors wherein 65 per cent of the total assets under management (AUM) under the scheme is invested in domestic equities while 35 per cent of the scheme's AUM is invested overseas. Under current regulations such a fund will be allowed to invest upto 10 per cent of its total AUM (across all schemes) in overseas equities as on March 31 of the relevant year subject to a maximum of $150 million and within the overall $4-billion ceiling.

However, if the fund house floats a separate dedicated fund, both the restrictions may not apply.

The government is working out guidelines for these dedicated funds as well as for individuals who will invest in these funds.
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Sebi discovers new scam in IPO market
Mumbai: The Securities and Exchange Board of India has discovered a new scam in the IPO market concerning price manipulation unlike the earlier IPO allotment scam involving the infamous Roopalben Panchal.

Sebi said large-scale price manipulation was seen in six companies, including MindTree Consulting, on the day of listing and has banned seven entities from trading at the stock exchange. These include Latesh Chheda, Viren Kenia, Bhavin Chheda, Chetan Rathod, Neptune Fincot, Dhiren Pajwani and RSS Investment.

According to Sebi, large orders were placed much below the prevailing market price on the day of listing, thereby rendering them as frivolous orders making no commercial sense.

The other recent listings in which such price manipulation was seen are Pochiraju Industries, Cambridge Technologies, Shree Astavinayak Cine Vision, Pyramid Saimira, and Al Champdany.

A Sebi order said the intention of placing such orders was not for genuine trading but only for artificially enhancing the levels of demand.

The entire large order quantity was revealed to the market in one stroke, which is an uncommon practice in the market. Sebi was able to unearth the manipulation through its recently installed Integrated Market Surveillance System.

A genuine buyer of a large quantity of shares would not like to disclose the entire size of intended purchase as it would normally impact the price. Sebi said such conduct is not consistent with anything other than market manipulation.

Officials said on the day a stock lists on the market a handful of operators ensure that its price shoot up and stays high on the day of listing and over the next few trading sessions. The intent is to corner a chunk of shares intended for retail investors and sell them when demand shoots up.

The regulator has also warned brokerages Maniput Investments, Magnum Equity Broking and Prashant Jayantilal Patel for allowing some of these operators to trade through them. Pochiraju listed at a premium of 63 per cent (Rs 45), Mindtree at 60 per cent (Rs 620), Asthavinayak at 18 per cent (Rs 189), Pyramid at 35 per cent (Rs 135), Cambridge at 28.6 per cent (Rs 48.90).
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14 entities barred from markets for abnormal dealings in GHCL
Kolkata: The Securities and Exchange Board of India has barred 14 entities of a New Delhi-based business house called Jalco Group and its associates as also 9 directors of the group from dealing in shares of GHCL.

Mr G. Anantharaman, whole-time member of SEBI, also ordered depositories not to give effect to any transfer of shares of GHCL lying in the beneficial owner accounts of the entities and their directors.

The GHCL stock crashed 10 per cent to Rs165.15 from Rs183.45 while volumes also dwindled to about 31,000 shares against its two-week average of 1.91 lakh shares.

The regulator has initiated a full-scale inquiry into the suspected manipulation in the stock through synchronised trades. The combined trades of Jalco Group entities in GHCL counter on the BSE and NSE platforms in the relevant five months represented more than 40 per cent of the total transactions in the counter.

The SEBI probe also discovered that three of seven other entities sharing the same New Delhi address as Jalco group and with 70 client accounts with 17 brokers of BSE and NSE, were mentioned as part of the promoter group of GHCL as on September 30, 2006.

SEBI observed that they had not dealt in the GHCL stock during the relevant period. "However, it is possible that they are apparently related to the Jalco Group and that they may have their own plans to trade the GHCL scrip adopting the same modus operandi as Jalco Group at an appropriate time to sustain the volume," SEBI whole-time member felt.
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Sebi bans German brokerage Dresdner Kleinwort
Mumbai: The Securities and Exchange Board of India (Sebi) has barred German brokerage house Dresdner Kleinwort Wassertein Securities (India) (formerly, Dresdner Klienwort Benson Securities) from the Indian securities market for price manipulation in the DSQ Software scrip in October 1999.

A Sebi probe into the unusual rise in DSQ Software scrip from Rs255 to Rs2,631 in the six months from October 1, 1999 to March 31, 2000, found that Dresdner Kleinwort was involved in "synchronised trading" of shares in the company, a Sebi statement said. Sebi has cancelled the certificate of registration of the brokerage firm.

Earlier in 2004, Sebi had suspended Dresdner Klientwort's certificate of registration for similar transactions in the shares of DSQ Software, DSQ Biotech, Global Tele, which were considered to be manipulated by rogue trader Ketan Parekh.
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Shareholders to get abridged balance sheets
Mumbai: Listed companies will now have to submit only the salient features of their balance sheets to shareholders instead of the complete report according to a circular from Sebi. The amendment will come into effect immediately. The SEBI plans to amend Clause 32 of the equity listing agreement to align it with the provisions of Section 219 of the Companies Act, allowing a company to send a statement containing important features of the balance sheet, profit and loss account and the auditor's report in place of the full balance sheet and annual report.

Other provisions of Clause 32 pertaining to turnover and income from new activities, along with the cash flow statement tagged to the profit and loss account, shall remain unchanged.

The SEBI move should trim the rising cost of compliance. Also, in today's day and age, most of the information is available in the public domain, including the Web sites of the company and stock exchanges, the circular said.

The requirement to send the complete report was stipulated at a time when information flow was at the barest minimum and the annual report was the lone source of information for shareholders.

The SEBI has directed all stock exchanges to appropriately amend Clause 32 of the listing agreement.
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