Sebi bars Shankar Sharma from mkts for 1yr..........

Sebi bars Shankar Sharma from mkts for 1yr
Published on Fri, Feb 13, 2009 at 20:16 , Updated at Fri, Feb 13, 2009 at 21:51 Source : CNBC-TV18

The Securities and Exchange Board of India has barred Shankar Sharma from dealing in securities for one-year. The order pertains to a 2001 investigation and comes into force immediately after four weeks. Sharma indulged in fictitious trading, did not cooperate with Sebi, and indulged in concerted attempt to intefere with markets, it said.

Meanwhile, the market regulator has disposes off the show cause notice against Devina Mehra of First Global.

Commenting on the issue, Devina Mehra said they were only asking Sebi for the probe report which is not providing documents. She said they will appeal against Sebi order on Shankar Sharma.

Here is a verbatim transcript of the exclusive interview with Devina Mehra on CNBC-TV18. Also see the accompanying video.

Q: What do you make of this order from Sebi at this point in time?

A: It is patently illegal for one. It doesn’t keep to Sebi’s own laws. This is the same thing that has been going on since 2001. The whole thing started with the allegation that we had brought down the market in mid-February to mid-March in 2001. As we have’ve got the data out of the Sebi through RTI because they resisted it all along, we found that we were not among even the top 50 sellers during that period.
In fact, we were buyers and we could not have brought down the market. The thing was that at that point Sebi had show caused both the broking company that we own as well as Shankar Sharma and me individually. The whole process was gone through and both individuals were exonerated and orders were passed only against the companies. Thereafter even the order against the companies did not hold when we went and appealed in SAT. So, those were also struck down. By which they had again started this process of again showcausing us on the same material which is really absurd.

On top of that, when we went to court they actually filed an affidavit saying that if the order against the company does not stand, then obviously the show cause against the directors would fall. Even so, as all of you know, the orders against the companies did not stand. Yet the regulator has gone ahead and passed an order against an individual on the same material. In fact, they have tried to bring in another material, which is not allowed as per Sebi’s own regulations, because you need to have an investigation report showing that this material has been investigated before an order or a show cause can be released.

Q: There are two points in the Sebi order, one is that this pertains largely to 10 scrips in which transactions happened. Its allegation is that there was a circular trading, there were synchronised deals that happened. I would like your reaction on that? Point number two is that the regulator made several references to the fact that post the Bombay High Court order where they were supposed to serve a show cause notice, there was not much cooperation that came in through Shankar Sharma in terms of responding to those show causes and taking the opportunity of personal hearing. What is your reaction on both these points?

A: The whole point was that when a show cause notice or for that matter any legal proceeding is without basis or without jurisdiction, you have to first question the jurisdiction and the regulator or whatever the authority is supposed to first satisfy you on that point that they do have the jurisdiction because you cannot submit yourself to a process that is without jurisdiction or not within the law. So, we were only asking them for example for the investigation report on which this was based because that is a requirement as per Sebi’s own law.

However, the regulator does not want to go by its own law. So, they never satisfied us or gave us material on that and just went ahead with this.

As far as charges per se is concerned, this is a time when as a member of the Bombay Stock Exchange there were limits on your trading volume, which was a reason why all of us had multiple memberships. Our firm itself had three memberships with the BSE just because of that limit. But there were times when because of your clients’ trading volumes you could even be exceeding those limits on three cards, which is why at times you would need somebody else’s limit and Niraml Bang had eight memberships on the BSE. So that was a natural place to go to just shift some of your positions. There was nothing more to it than that.

Q: Are you going to go into appeal on this order?

A: Of course. You have to remember another thing that this order has been stayed in advance by the Bombay High Court. So, that was precisely to give us that window to go into appeal. So, obviously we are going to appeal this order.

My Commnets:

I was asked why am writing against Shankar Shrama?I don't remember who asked that....

My view is vindicated .He is charged for fictituous trading.What is that?That is what KP was barred for.KP did for bull market and SS did for bear market breaking the prices through fictitious trading and remember this is for the case in 2001.After 2-3 yrs there can be more cases for the debacle in 2008 as well.Mark my words.

No one has taken bath in milk all are same.

It is very obvious that SS wants to break the market and that is why he use to advocate bearish view and some of his arguements are real absurd.I have discuss one here about his arguement on Aban LLyod.

He also feels that Ril Ind,SBI ,Bharti and likes are still way above their 2003 low and unless they touches that mark , he says we cannot say we are in bear market.

Just a couple of days back I read in TOI that FII's holding has come down to the level of 2003.That is a great news.If the holding has come down at 2003 then it means the over ownership is over.DII's now owns more then FII's in A gr shares.

Read On:

FII holdings in Indian cos down to 2003 level
13 Feb 2009, 0111 hrs IST, TNN
MUMBAI: Foreign investors, the most influential investor group in the Indian market, have reduced their holdings in Indian companies drastically in
the last four quarters and are back to their December 2003 holding levels. However, domestic institutional institutions (DIIs), led by insurance companies, have cushioned part of the FII exodus. And now, for the first time ever, DIIs own more than what retail investors hold in Indian companies, an analysis by a Citigroup arm of the latest disclosed shareholding patterns showed. The report also pointed out that for the first time in four years, DIIs and retail investors, that excludes promoters, own more than FIIs. In BSE 500 stocks, which make up for 94% of the all BSE listed companies, DIIs now hold 8.86%, while retail investors hold 8.64%. Retail investors, who were holding 16.4% of the BSE 500 companies in March 2001, have mostly been shedding their positions since then. Sebi data also shows that in 2008, FIIs took $13 billion (Rs 54,500 crore) out of the Indian market, a trend reversal from a $17 billion (Rs 72,700 crore) net inflow in 2007. Compared to this, DIIs -- which include mutual funds, insurance companies, banks and other financial institutions -- pumped in nearly Rs 14,000 crore in 2008, more than double the Rs 6,400 crore they had invested in 2007. The Citi report titled Back to...2003' said the last quarter's sell-off, when about 1.4% of FIIs holdings were sold, brought it down to 15.5%, the same level where it was five years ago. This is the same level where it was during the early days of the last bull market. In value terms, foreign ownership is still higher at $94 billion than in December 2003, but the level is almost of an age gone by,'' the report said. The landmark shift in ownership data, showing DIIs holding more than the combined holding of retail investors, could also be a sign of a maturing market. Domestic investors (ex-promoters) now collectively own more than foreigners for the first time in four years. The big gainers continue to be the insurance companies who now own 5% of India Inc,'' the report said. Foreign funds are known to concentrate their holdings in blue chips and the latest data corroborates the same. As of last quarter, FIIs held 22.5% in the 30 sensex stocks, while retail investors held 8.6%, insurance companies 6.4% and mutual funds 4.1%.