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Penny stock brokers under fire from Sebi
BS Markets Bureau in Mumbai | October 01, 2005 12:20 IST
Continuing its crackdown on errant promoters and operators in penny stocks, the Securities and Exchange Board of India on Friday barred the promoters and directors of Prime Property Development Corporation Ltd and Konkan Tyres Ltd from trading in the stocks of their companies till further orders.
With this, the capital market regulator has banned promoters and directors of four companies from dealing in the market and has suspended trading in six stocks for alleged manipulation so far.
The stock exchanges, on their part, have also suspended trading in the stocks of errant companies. In the past one week, the Bombay Stock Exchange has suspended trading in 27 stocks, while the National Stock Exchange has suspended six.
PPDC is also prohibited from accessing the capital markets, while KTL is directed not to issue any equity shares or alter its capital structure till further direction.
Taking a cue from the Sebi directive, the market hammered the PPDC stock close to the lower circuit filter of five per cent today to Rs 190.35, with a meagre volume of 1925 shares against a two-week average of 45,479 shares. The stock spiralled upward from Rs 14.60 on March 11, 2005 to touch a high of Rs 308.25 on September 12, 2005, according to BSE data.
The directors of PPDC prohibited from dealing in the shares are Padamshi L Soni, Manish P Soni, Vishal P Soni, Prakash D Shah, Siraj M Somji, Nitin R Kilawala, Viren C Mikshita, Siraj M Somji, Shabbir M Somji, Dilshad SS and Shainaz SS.
The clients of PPDC that are banned from trading in the stocks are Pratap Sanghvi, Hitesh Vora, Manherlal Vora, Sandeep Pravin Shah, Chetan Mehta, Amit Pandya, Mehta Consultancy, Nisha Mehta, Jaswantrai Mehta, Dhanlaxmi Mehta and Jaswantrai Mehta.
The stockbrokers prohibited from trading in the stocks on behalf of the promoters, directors and the clients of the company are Indiabulls Securities Ltd (formerly Orbis Securities Pvt Ltd), Mansukhlal M Upadhyay, Harikishan Hiralal, Ajmera Associates Pvt Ltd and Ventura Securities Ltd.
KTL promoters and directors prohibited from trading in company stocks are OG Soni, Sunil Kumar Menon, Ramesh Kumar Putta, Fateh Sinh Solanki, Narayan N Iyerare, Indu Omprakash Soni, Konkan Capfin Ltd, Olympic Agro Industries and Esskey Rubber Industries Pvt Ltd.
The regulator also directed brokers Bhupendra M Bheda, Unique Stock Brokers Ltd and DSE Securities Ltd not to transact on behalf of the directors. The KTL stock also ended 5 per cent lower at Rs 13.65. The stock has risen from a low of Rs 1.80 on December 10, 2004 to Rs 28.5 on August 18, 2005.