|Chennai||Rs. 24020.00 (-0.17%)|
|Mumbai||Rs. 25020.00 (0.28%)|
|Delhi||Rs. 24450.00 (0%)|
|Kolkata||Rs. 24600.00 (-0.32%)|
|Kerala||Rs. 24050.00 (0%)|
|Bangalore||Rs. 24160.00 (-0.17%)|
|Hyderabad||Rs. 24030.00 (-0.12%)|
MUMBAI, Jan 30 (Reuters) - India's market regulator has barred Angel Broking from taking on new customers for two weeks and set penalties on three other small brokerages for artificially boosting trading volumes in shares of a software developer more than a decade ago.
The Securities and Exchange Board of India (SEBI) accused Angel Broking of working in tandem with the three other brokerages to generate the bulk of trading activity in shares of Sun Infoways Ltd from Feb. 5 to March 2 in 2001.
Shares of Sun traded in the range of 342 to 296 rupees during that period, after which shares slumped to as low as 60.75 rupees on April 30, 2001, while trading volumes "reduced drastically," the SEBI said on Wednesday.
The artificial pumping of trading volumes to generate interest from other investors and push up share prices is widely referred to as "circular trading" in India.
SEBI rejected Angel Broking's response that it had acted "purely as a stock broker" for a client. Angel Broking had also stated there was "no evidence on record" it had acted as part of a group in collusion with one other, according to the regulator's statement.
"The occurrence of such synchronized deals in a circular manner persistently cannot be said to be a co-incidence as the shares were being rotated intra-day within a closed group and there was no change in the beneficial ownership of the shares," SEBI said.
The regulator said such a pattern of deals created a false impression of active trading in the shares.
SEBI barred Angel Broking from taking on new customers for two weeks starting 21 days after its statement on Wednesday. Allwin Securities Ltd and Bharti Thakkar India Securities Pvt Ltd also received the same penalty.
In addition, SEBI suspended the certificate of registration for brokerage N.C. Jain for one week.
"Management is looking into the matter and a suitable action would be taken soon," a spokeswoman at Angel Broking said when contacted by Reuters.
Officials from Allwin, Bharti Thakkar and N.C. Jain were not immediately reachable. (Reporting by Rafael Nam. Editing by Jane Merriman)