The Securities and Exchange Board of India (Seb) on Wednesday absolved Indiabulls [Get Quote] Securities of charges of cornering shares meant for retail investors in IPOs and dropped an inquiry initiated against the brokerage firm.

"The present adjudication proceedings against the noticee (Indiabulls Securities Ltd) is disposed of," said Sebi Adjudicating Officer S Biju.

Although Sebi had last year banned Indiabulls from carrying out trades in the market after a scam was unearthed in IPOs launched between 2003-05, the order was kept in abeyance till completion of the inquiry after the brokerage firm challenged the decision.

Sebi conducted an investigation into the dealing of Indiabulls in the IPOs of 21 companies including those of Amar Remedies [Get Quote], Datamatics Technologies [Get Quote], Dishman [Get Quote] Pharma and Chemicals, Gokaldas Export, ILFS Investmart, Indraprasth Gas, Infrastructure Development Finance, Jet Airways [Get Quote] and NTPC.

Other companies, whose public issues were investigated included Patni Computer, Suzlon Energy [Get Quote], TV Today Network [Get Quote], TCS [Get Quote] and Yes Bank [Get Quote], the regulator said in a statement.

Sebi had observed that the some entitites had cornered shares of these companies by making fictitious applications in the category reserved for retail investors.

Sebi said the after the inquiry it found that Indiabulls did violate the SEBI Act or its regulations on prohibition of fraudulent and unfair trade practices relating to securities market.

Sebi said it had noted that in the IPO of Tata Consultancy Services Ltd., 13,939 shares were received from 559 accounts to the Indiabulls' account.

Later, on the advice of Sebi, National Securities Depository Ltd conducted an inspection of all these accounts, but nothing was found wrong, as the demat accounts were genuine, said Sebi.

An inspection was also carried out by a team of officials of Sebi, BSE and NSE, of the 559 clients who had transferred TCS shares to the Indiabulls. Of these, 459 clients held demat accounts with it and the remaining clients held beneficiary accounts with other depository participants.