Tribunal upholds Sebi ban on Shankar Sharma

Written by fe Bureaus | Mumbai | Updated: Oct 29 2009, 06:07am hrs
The Securities Appellate Tribunal (SAT) has dismissed First Global Stock Broking MD Shankar Sharmas appeal against the Sebi order that prohibits him from dealing in the securities market for a year.

Upon receiving the SAT order, we will be reviewing it and will file our appeal in the Supreme Court. Till then, the order continues to be stayed as per SAT itself, an official statement from Sharma said.

Sharma was barred from dealing in the capital market after market regulator Securities & Exchange Board of India (Sebi) found him guilty of executing synchronised trades on a large scale in 10 scrips, including Satyam, Infosys, Wipro, SBI, and MTNL. This resulted in artificial volumes in these shares in early 2001. Sebis investigation found Sharma was both the buyer and seller of the same scrip at the same time, and the trade was executed through two different brokers, Bang Equity and Vruddhi Confinvest India (P) Ltd, a sub broker with First Global.

However, Sharma had then claimed that it was a ploy by the government to implicate him for financing Tehelka portal, which exposed the arms purchase scam during the NDA regime. Sharma then had a 14% stake in the portal. The SAT ruling said that since this fictitious trade didnt result in a change in the beneficial ownership of the shares traded, such trades are only meant to create artificial volumes and they disturb the market equilibrium.

We are satisfied that the appellant executed fictitious trades by taking opposite positions. The trades were also manipulative in as much as the buy and sell orders were placed at almost the same time. In this view, no fault can be found with the impugned order, the order stated.