MUMBAI, May 10: The Security & Exchange Board of India has directed the Bombay Stock Exchange (BSE) to divert the impounded amounts of Jyoti Resins & Adhesives to the investors protection fund of the exchange.

Jyoti Resins was listed on the BSE on December 2, 1994 at a price of Rs 15 (at a premium of Rs 5) over the offer price of Rs 10.

The watch dog had conducted a series of investigations into the alleged price manipulation in the equity shares of the company, when it touched a high of Rs 202.50 on February 9, 1996. In order to curb these malpractises the exchange decided to suspend trading in this stock with effect from July 19, 1997 for an indefinite period. The stock was last traded on BSE on July 18, 1996 at Rs 64.10.

As per market sources, the company circles were involved in price rigging, with majority of the shares held by the company circles which eased their efforts in jacking up the share price.

After considering investigation reports, and having come to the conclusion that there were market manipulations in the prices of this scrip, SEBI has directed the exchange that as far as auction proceeds are concerned, the difference between the auction price and the standard rate, and the close-out proceeds are concerned, the difference between the close-out rate and the standard rate which have been retained by the SE shall be impounded. SEBI has once again instructed the BSE to direct this impounded amount to the investors' protection fund of the exchange.

In its detailed note to the exchange, SEBI has further decided that auction proceeds up to the extent of standard rate of the respective settlement may be released to all the offerors who have delivered the shares.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.