Broker Shankar Sharma, 41, has reasons to be pleased. First, the head of First Global Stock Broking Pvt Ltd is going to be a father -- his wife Devina Mehra, 38, is expecting their first child next week.
Secondly, Sharma has been cleared of charges aired after the Bombay Stock Exchange's Sensex crashed in March, 2001, that his firm had indulged in circular trading with bears (specifically, the Nirmal Bang group of broking firms) and manipulated the prices of shares.
Last Friday, the Securities Appellate Tribunal overturned a Securities and Exchange Board of India order banning First Global and Vruddhi Confinwest India Ltd from participating in the Indian market.
Sharma was barred from the Indian capital markets and arrested in April, 2001, but was let out on bail and no charges were pressed against him. He spent the next three-and-a-half years in London (his firm has a card on the London stock exchange), elsewhere in Europe and in New York -- his firm operates in around 50 markets in Europe, the US and Japan.
Late Saturday night, Sharma flew in from New York and sid he expected to plunge into the Indian stock market in about a month.
The ban on First Global operating in India seems to have been a blessing in disguise -- it has helped make the brokerage a global firm.
"Our focus is a lot more global now," he told Business Standard, adding, "We do business in 50 to 70 markets across the world."
The former Citibanker continues to be a stakeholder in Tehelka.com, whose expose of the corruption in defence dealswhen the BJP-led National Democratic Alliance was in power, he believes, was largely responsible for the investigations against him and his companies.
"I am still continuing as an angel investor in it, though our exposure now is smaller as our stake has become diluted over the years." When Sharma was arrested in 2001, First Global held a 14.5 per cent stake in Buffalo Networks, the company that owned Tehelka.com.
Sharma says that most of the income tax cases filed against him have been resolved, apart from one or two disputes.
Sharma's bitterness of 2001 and 2002 has passed. "The present government has been very sympathetic," he says, adding, "The Congress and the Left parties have been very supportive."
Brokers in general, he says, are pleased at his vindication. "This kind of a thing could happen to anybody. Every time a Sebi order is disputed and set aside, it will raise questions in people's minds on the way Sebi works," he adds.
So is he glad to be back in circulation in the Indian stock market again? Sharma replies: "There are other markets in the world. Now we can add India to them."
He concedes that the Indian market has become more organised, with rolling settlements, corporatisation and derivatives. Yet Sharma is quick to add: "All markets in the world have become more exciting. There is nothing super-extraordinary about India."
In September 2002, Sebi cancelled his broker's registration. But, says Sharma, First Global does not have to seek registration again because he had obtained a stay on the registration being cancelled. "The order never came into force. We imposed a voluntary restraint on ourselves until the entire enquiry was over," he explains.
Sharma continues: "We had expected the case to be settled earlier but the hearings were being constantly adjourned. We filed our first appeal in September 2002." The first hearing was held only in September this year. Sharma said that he never had any doubts that the case would go in his favour.
SAT also turned down an appeal by the capital market's regulator for a stay that would have allowed Sebi ample time to appeal to the Supreme Court against SAT's ruling.
"We do not think there is any substantial question of law that arises for consideration in this appeal to enable us to stay the order. Nor is there a provision in the SEBI Act that obliges us to do the same," SAT said in its order. The tribunal also directed Sebi to allow First Global's BSE terminal to be revived.
SAT questioned the validity of Sebi's order, as it was not passed within 30 days of considering Sharma's reply to a show cause notice, as required by the rules.
