Sebi, had recently issued an order suspending CSLs registration for not exercising due diligence, care and skill of a registered stock broker in respect of a transaction valued at Rs 6.75 lakh which occoured in 2001. It recommended a penalty of suspension of registration for a period of two months with effect from February 17. Consequent to the Sebi order, CSL approached the appellate tribunal and has obtained a stay.
The case is posted for hearing on April 4. Sebi had conducted an investigation into the unusual movements in Moschip Semiconductors Ltd (Moschip) scrip during the period May 7, 2001 to May 31, 2001, sources informed. During the investigation they found that a customer had traded substantially in Moschip scrip which resulted in higher price level.
On completion of the investigation, Sebi felt that CSL had failed in exercising due care in dealing with a customer and also in executing a transaction as a registered stock broker and passed an order suspending its registration.
CSL does exercise due care and skill while trading but it did not have any reason to suspect the particular customer as value of the transaction was very low. It was 0.1% of the total value of transactions traded by the company. But still the order was passed on the basis that CSL has not exercised due diligence in executing the transaction, they added.
Chola to raise Rs 650 cr
The board of Cholamandalam Investments and Finance Ltd has approved an issue of non-convertible debentures (NCDs) to the tune of Rs 650 crore on private placement basis. This would include medium-term and short-term NCDs up to Rs 400 crore and Rs 250 crore respectively. The board has approved an NCD issue in one or more series to mutual funds, institutions, banks, bodies corporate and other agencies.