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FM in touch with SEBI on post-budget market crash probe

Concerned over the unexpected crash at the stock markets within days of the presentation of Union Budget 2001-02, Finance Minister Yashwant Sinha on Tuesday said the government would soon find out the reasons for which it was in touch with market regulator SEBI.

When asked about the unusual behaviour of the market after the budget, Sinha said "Ministry is in touch with them (Securities and Exchange Board of India)."SEBI is holding an enquiry. Let us find out," he said.

SEBI Chairman D R Mehta said on Monday that investigations into post-budget crash at the stock exchanges would cover 14 entities, including foreign broking firms.

Sinha said reasons for the crash of the market, after a 177 point jump in the BSE index after the presentation of the Union Budget on February 28, would be known soon.

Drawing a team of about 40 persons from SEBI, Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) and other exchanges to carry out the investigations, Mehta had said the team could be enlarged as the investigations would progress at the major exchanges.

He said two-three more foreign firms were being probed in this connection.

Besides the probe, Mehta had announced a few measures including limiting the margins to check market volatility.

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