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Sebi to probe TFL over circular trading

Even as auditors A F Ferguson face the critical scrutiny of the Department of Company Affairs for alleged malpractices linked to Tata Finance controversy, the Securities and Exchange Board of India has launched a fresh probe into the books of the finance company on charges of circular trading.

"The fresh probe has been initiated after we came across a reference to circular trading in the report prepared by chartered accountancy firm A F Ferguson on irregularities in Tata Finance," Sebi sources said in Mumbai on Thursday.

Sources said a copy of the controversial report was later withdrawn by the firm after some of its portions were leaked to the media.

"We are still investigating the issue and have not arrived at any conclusions," they added when asked whether there was any indication (in the report) of any malpractice on the part of former TFL managing director Dilip Pendse.

According to sources, Sebi is already investigating insider trading, allegedly done by Pendse and another director J E Talaulikar, in the finance company's scrip.

While investigation into Taluaulikar's case was complete, the entire probe was in an advanced stage, sources said.

Reserve Bank of India also undertook a routine inspection of TFL's accounts.

DCA has consulted RBI and other regulators in connection with financial irregularities involving TFL and Ferguson report.

DCA had indicated that it may launch inspection of TFL's books of accounts to determine whether any financial irregularities had taken place.

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