Gelli, associates sold 2 cr GTB shares in July

The public holding in GTB had gone up from around 44 per cent to over 53 per cent as the promoters sold heavily. Taking Gelli and his family members alone, and assuming an average price of Rs 10 per share, Gelli has pocketed close to Rs 6.86 crore by dumping shares on unsuspecting investors.

Palanimanickam’s reply added that SEBI has conducted an investigation into the trading in the scrip of GTB during April 1, 2004 up to July 29, 2004. The regulator has already submitted its preliminary report to the Finance Ministry. The minister further indicated that Sebi’s investigation into the matter has not yet been completed.

The Indian Express had carried a report highlighting the steep rise in volumes and prices of GTB before the moratorium was announced on July 24. Market experts who smelt something fishy in the steep rise in volumes suspect that most of these sales would have taken place before the RBI move on GTB became public.

While the minister did not specify the number of shares sold by Gelli and family before the moratorium, the timing of sales is very close to July 24. GTB, which was trading around Rs 13 before the moratorium, has now dipped to Re one on the BSE.

According to the figures given in Parliament, Sebi found that after the completion of the two-year ban, Ramesh Gelli sold 21.67 lakh shares, Premkala Gelli sold 22.56 lakh shares, Girish Gelli 9.55 lakh shares, Annapurna Sridhar 3.85 lakh shares and Neeraj Gelli 14.86 lakh shares between April 1 and July 29, 2004.

The other entities that sold shares include Ashok Mittal and Co (15.37 lakh shares), Claridges Investment and Finance (7.33 lakh shares), European Investments (46.65 lakh shares) and Far East Investments (55.25 lakh shares).

SEBI had banned Ramesh Gelli, family members and associates from buying and selling in the market in 2002 following Gelli’s involvement in the stock scam of 2000.

The promoter group entities had filed an appeal before Securities and Appellate Tribunal on April 19, 2004 and the tribunal stayed the order of Sebi for four weeks following which the regulator appealed before the SC, which stayed the order passed by SAT. Therefore, the prohibition order ran its course up to June 30, 2004, the Minister’s reply said.