Fin Min: No evidence of manipulation in stock mkts and movement orderly; SEBI has not informed the govt on any mkt manipulation

The Finance ministry has no evidence of manipulation in stock market and SEBI has not informed the government on any market manipulation, reports the NW 18, quoting an aide. Finance Ministry says stock market movement are in order.

Earlier today, the ET had reported that the capital market regulator SEBI is keeping tabs on the activity of several players in both primary and secondary market following leads that some of the market manipulators may be operating through front outfits.

The dizzying rise in stock prices over the past few weeks has only fuelled suspicion that some of the old hands who were indicted for their violations in the securities markets may be back at their game.

Sources told ET that one of the central security agencies has alerted the finance ministry on the matter. It has also furnished a list of names of such operators who it feels are active through firms in which they are not directly connected.

Manish Marwah, Nirmal Kotecha and even Ketan Parekh are included in the list. The agency suspects that these operators were active in IPOs of Indowind Energy, Alpa Labs and Puravankara Projects, besides a few other issues. Both Marwah and Kotecha were indicted by SEBI for the manipulation in shares of real estate firm Atlanta.

It’s learnt that SEBI is also tracking the surge in the prices of stocks like IFCI and a few index heavyweights which have contributed to the recent bull run.

Government officials said that the country’s intelligence agencies have been on an overdrive naming several players with suspect credentials or who have a track record of manipulating stocks as being active now.

However, it’s been hard for the regulator as well as the security agencies to establish a direct link between cases of stock price manipulation and some of these operators.

In the past, there have been cases where such agencies have suspected that entities blacklisted by the regulator are playing the market, not just in stocks but also in commodity futures.

However, there have been times when they were off-target. Given the nature of surrogate ownership, financial layering and benami transactions, any investigation of this nature is painstaking and a strain on the regulatory resources.