Financial Daily from THE HINDU group of publications
Friday, Sep 23, 2005
Financial Daily from THE HINDU group of publications Friday, Sep 23, 2005 |
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Regulatory Bodies & Rulings Markets - Stock Markets Probe limited to select penny stocks: Govt `No list of deviant brokers, NBFCs in hand' Our Bureau
New Delhi , Sept. 22 IN what could come as a relief to a shaken stock market, the Ministry of Finance today clarified that the ongoing investigations into unusual price movements of shares was limited to a handful of `penny stocks' and that the Government has not identified any broking entity or a non-banking financial company (NBFC) for devious market behaviour. "Individual investigations are on. But the Government has no such list of NBFCs and brokers (against whom action is being planned)," the Joint Secretary, Capital Markets, Mr U.K. Sinha, said at a briefing to clear misgivings in the minds of market participants. It is understood that trading pattern of around 50 penny stocks is being looked into by the Securities and Exchange Board of India (SEBI). Terming the recent media reports that had mentioned names of certain leading broking houses, individual brokers and finance companies as possible target for probe as "highly speculative and irresponsible", Mr Sinha said that the Government was not planning any countrywide raids on any entity as has been speculated. "The Government has no intention to carry out countrywide raids (on brokers)," he said. However, he confirmed that the Income-Tax Department had raided the offices of five brokers and that it was based on "specific intelligence reports that were developed over a period of time and were planned much in advance." Meanwhile, the Central Board of Direct Taxes (CBDT) too has clarified that searches in Gujarat were part of normal investigation carried out by the I-T Department. "There is no basis for drawing any speculative conclusions from the searches carried out," CBDT has said in a release. Mr Sinha also denied reports that suggested that he was asked by the Prime Minister's Office to rush to Mumbai to be part of the investigations. "I had gone to Mumbai to attend the board meeting of the UTI Mutual Fund and Central Bank of India," Mr Sinha said. He termed as "partially correct" the earlier reports that the Finance Ministry top bosses had a meeting with intelligence agencies to discuss capital market issues. "The meeting was in the context of action taken on the last Joint Parliamentary Committee report. We discussed the need to expedite action on some entities that were found guilty," Mr Sinha said.
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