MUMBAI, JAN 8: In a delayed move, the Bombay Stock Exchange (BSE) has decided to suspend indefinitely eight B2 group scrips from January 10, pending further investigation. Trading in these scrips was initially suspended for three days due to high volatility and unusual volumes coupled with rise in share prices. With the BSE suspecting major price manipulation, these scrips have now been suspended indefinitely.The BSE move to crack the whip follows widespread price rigging in several scrips, especially software stocks. ``Share prices of these 8 scrips had gone through the roof recently. The exchange should have acted earlier,'' said a broker. The scrips suspended by the exchange are: Alps Infosys, Cauvery Software, Media Video, Sawaca Finance, VMF Softech, Trillenium Technologies, Net Vista and Top Cassettes.Out of these 8 scrips, five are software scrips with hardly any business activity. The sharp rise in Net Vista and VMF Softech has surprised marketmen and exchange officials. Net Vista stock hadspurted from Re one to Rs 125 within four months. Similarly, VMF Softech zoomed from Re one to Rs 130. ``There was no reason for these scrips to shoot up in this manner,'' said an operator.Media Video zoomed from Rs 2 to Rs 111. The business volume of these scrips also shot up suddenly, raising fears of price rigging. ``The exchange and SEBI should launch investigation into brokers involved in these scrips. Some of these companies, especially the software companies, have no business operations. Some of them recently changed their name to take advantage of the software boom,'' market sources said.Similarly, 70 non-banking finance companies (NBFCs) whose applications for registration have been rejected by the Reserve Bank of India (RBI) are still traded on the Bombay Stock Exchange, putting thousands of investors at considerable risk of losing their money in such companies.Share prices of many of these companies were rigged by operators recently. As a result, several stocks which were quoting at Re 1and Rs 2 have shot up to Rs 25 and Rs 30. ``The exchange and SEBI should take immediate steps to delist such companies. NBFCs which have failed to follow the RBI norms have no business to be traded on the stock exchanges,'' said S Pande, a shareholder of one such NBFC.According to market sources, these 8 companies constitute only the tip of the ice-berg. ``There are at least 100 companies where riggers manipulated the prices. These companies were quoting below Rs five till four months ago. Now most of them have crossed Rs 30 and 40,'' said a merchant banker.Some of the so-called software companies which had shot up recently do not have any software business at all. They were engaged in financial services and now, to take advantage of the software price boom, changed their names to reflect software business. With rampant price manipulation playing havoc on investor safety, the Bombay Stock Exchange, in another delayed move, has decided to introduce circuit breaker limits for stocks quoting below Rs 20."We have been receiving reports of unwarranted price increases. in several scrips. We are taking this proactive measure to safeguard investor interest," said Anand Rathi, president of the exchange.
