In an appeal to prime minister Atal Behari Vajpayee, CERC says several company promoters actively indulge in market manipulation as has happened in the case of Videocon, BPL and Sterlite. In the case of MS Shoes, it led to the closure of the Bombay Stock Exchange (BSE) for three days in 1995.

The proposed case-by-case clearance of buy-back by the department of company affairs, CERC fears, will bring back `permit raj'. It might even become a tool to legitimise manipulation. Even the Securities & Exchange Board of india (Sebi) is reported to have expressed fear that the buy-back option might lead to insider trading and price manipulation. The corporate sector mighthave a field day in the absence of a stronger regulatory mechanism and judicial safeguards, especially where the investors' protection movement is in its infancy, CERC said.