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April 28, 2006 12:10 IST
Indiabulls Financial Services Ltd [Get Quote] said on Friday it will contest the Sebi order, which debarred Indiabulls Securities from dealing in the equity market.
The company informed the Bombay Stock Exchange that the order was based on 'factually incorrect data' and it would be contesting and filing its objections against the market regulator's order.
The only allegation against Indiabulls Securities in the Sebi order is that the company received 13,939 shares of Tata Consultancy Services [Get Quote] after its IPO from 559 different accounts, it said.
The order implies that the 559 account holders applied for TCS IPO on behalf of Indiabulls Securities Ltd to corner TCS shares by multiple retail applications and hence the 559 clients transferred 13,939 shares to Indiabulls Securities account immediately after the TCS IPO, the company said.
However, the 559 account holders, transferred the shares in the 'Client margin account' of Indiabulls Securities for their trading purposes towards meeting their margin requirements as per the stock exchange rules and regulations, it said.
As a brokerage, Indiabulls Securities is not allowed to undertake any client business without receiving adequate margin in the client margin account maintained by Indiabulls Securities Ltd in the capacity of a securities broker.
Indiabulls Securities caters to over 2,60,000 retail accounts and has received margin in its client margin account in the form of shares from over 1,14,000 unique clients.
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