NEW DELHI, June 17: The market regulators have come across more than 200 cases of suspected abnormality in the share price movements and trading volumes so far this year—a figure mostly seen during a full year in the past.
The stock exchanges, which work as front-line regulators, have issued more than 150 notices to various companies due to unusual movements in share prices or volumes so far in 2012.
Besides, the Securities and Exchange Board of India (Sebi) has found out about 60 other cases of suspected irregularities in share prices and trading volumes through its surveillance mechanism during this period, sources said.
Ever since the bourses began seeking clarifications on the basis of unusual price or volume changes, they have been issuing about 100 such notices a year. However, such notices (about 90 by the BSE and over 60 by the NSE) have already exceeded 150-level in little over six months in 2012.
These also include notices seeking clarifications for media reports that might have bearing on the stock movements.
Sources said the regulators are also concerned over a growing trend of the companies mostly expressing ignorance in their clarifications to such notices.
“In reply to such notices, the companies mostly assert that they are not aware of the issue reported in the media or the events having led to sharp movements in their stock prices or volumes,” a senior regulatory official said.
“However, the concerned media reports turn out to be true in many cases within days, while in some cases, the companies have also announced some material stock-moving developments soon after replying in negative to the notices,” he said.
The possible measures to tackle such scenarios are being worked out, the official noted.
Earlier this month, Sebi asked the bourses to issue “caution letters” to market participants for any unusual stock movements and asked them to take adequate measures to stop any abnormal trading activities after issuance of such letters.
If remedial measures are not taken by the brokers after receipt of such ‘caution letters’, the exchanges would inform the Sebi for further action against non-compliant entities.
The companies where unusual price or volume changes have been suspected by the bourses and which have been sent notices in this regard so far in 2012 also include public sector entities like MMTC, MOIL and Hindustan Copper.
Clarifications have also been sought from Vijay Mallya-led UB group entities like Mangalore Chemicals and Fertilizers, United Breweries Ltd and United Spirits Ltd, as also firms like Piramal Life Sciences, Bajaj Finserv, Apollo Hospitals, HFCL, GVK Power, Suzlon and Parsvnath.
Various media reports have also led clarifications being sought from companies like Reliance Industries, Sesa Goa, Sterlite, HCL Info, Pantaloon Retail, MTNL and JSW Steel. (PTI)
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