In June 1998, there were widespread allegations of manipulation in thescrips of BPL, Videocon and Sterlite. Sebi investigation in this matterfound that some brokers, acting in concert for a common set of clients, hadbuilt up unusually large positions in these scrips resulting in distortionof the market equilibrium and creation of artificial market.

On Wednesday, Sebi ordered cancellation of registration of membership of SNTara, a former member of the BSE who was earlier declared defaulter by theexchange, and its card has been sold. Sebi has also passed orders for thesuspension of the registration of two other brokers ie, Rajratan R Mohta,Ramrakh R Bohra and also that of Malar Share Shoppe, a sub-broker toBohra.

Sebi has suspended Mohta till June 11, 2001. In the case of Bohra and MalarShare Shoppe, the suspensions have been ordered till July 3, 2000 and May 1,2000. The above period of suspensions, have been reckoned from the date whenthe trading terminals of the members were switched off by BSE or they weredirected not to undertake fresh broking business pursuant to Sebi orders.

Sebi investigation found that these brokers dealt on behalf of a common setof clients ie, Damayanti Group for the first time which did not have anyprofessional expertise in the securities market and financial soundness todeal at such large scale. Also they did not charge any upfront margins fromthese clients. These brokers acting in concert with other brokers corneredlarge quantity of shares of BPL, Videocon and Sterlite (70 per cent ofdeliverable shares of BPL, 40-50 per cent of Videocon and Sterlite) andcreated artificial market and manipulated the prices of these scrips andupset the market equilibrium.