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Bombay court finds Big Bull guilty in securities case linked to MUL; markets in a tizzy, Sensex on a roller-coaster; Reliance buys Raymond Synthetics

The Bombay Stock Exchange opened on a firm note on Monday morning. Reports that exit polls indicate a comfortable majority for the ruling Bharatiya Janata Party-led coalition have gone down well with marketmen. Buying was firm on speculating and institutional activity.

The BSE Sensex opened higher and at 1245 hours IST, was hovering in the 4800 level. It touched 4816 before receding. Compared with Friday's close, it is up 58 points or 1.21 per cent. However, when reports last came in, the Sensex was at 4765 level, up seven points over Friday's close.

Meanwhile, the Bombay High Court on Monday found former stockbroker Harshad Mehta guilty in one of several cases filed against him connected with a multi-billion securities market scandal.

Justice M S Rane, presiding over a special court set up to hear cases relating to the 1992 scandal, held the 'Big Bull', guilty of fraudulently diverting into his own account money belonging to car-maker Maruti Udyog Limited, a joint venture between the Indian government and Japan's Suzuki Motor Corporation.

"Harshad Mehta in furtherance of criminal conspiracy did dishonestly misappropriate four bankers cheques aggregating Rs 389.7 million drawn by Maruti Udyog," the court judgment said.

Mehta is likely to be sentenced tomorrow.

The Central Bureau of Investigation, India's federal police, filed 44 cases following the 1992 scandal which allegedly involved stock brokers and bankers siphoning money from government securities to use on the then-booming Bombay Stock Exchange.

The news spread like wildfire through the markets. The BSE Sensex tumbled some 150 points from its intra-day high of 4871.34 to 4736.65. It opened at 4822.16.

The share price of Reliance Industries Limited spurted to Rs 223.70 on reports that the Ambanis have hiked their stake by two per cent in RIL from 26 per cent to 28 per cent through creeping acquisition route (purchase of stock through the secondary market).

Commodities were in the limelight in spite of the hike in petroleum prices which is expected to dampen the sentiment and affect the cement and metals sectors.

At the National Stock Exchange, the S&P CNX Nifty was almost steady at 1412.45. The Nifty ended at 1413 on Friday. Today, the Nifty opened at 1414.65, touched 1426.55, plunged to 1389.55 before recovering to 1397.90.

There are rumours that Raymond's has sold off its steel plant and that the announcement is likely to come through the BSE notice shortly. In a separate development, Reliance Industries has bought Raymond Synthetics. Further reports are awaited.

At the inter-bank foreign exchange market, the rupee was being traded at 43.56 to a US dollar, the same level at which it closed on Friday. Forex dealers said the steady trend will continue until the new government takes office.

At close, the Sensex was at 4716, down 42 points or 0.88 per cent. The Nifty was at 1390.15, down 23 points or 1.62 per cent.

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