Home Trade volume accounted for 99.6% in Pune exchange

Home Trade stock was rigged on the Pune Stock Exchange (PSE) with the trading volume in the stock accounting for almost 99.6 per cent of the...

Home Trade stock was rigged on the Pune Stock Exchange (PSE) with the trading volume in the stock accounting for almost 99.6 per cent of the PSE turnover in the last a few months. However, the PSE and the market regulator Sebi failed to notice the malpractice and the company was allowed to continue rampant rigging.

Trading in various scrips on the PSE has been very poor and over last nine months, over 90 per cent of trading on the bourse was only in Home Trade stock, according to Investors’ Grievances Forum (IGF) president Kirit Somaiya. IGF, quoting Sebi’s data, said the percentage of turnover in Home Trade to total turnover on PSE was a mere 0.17 per cent in 1999-2000, 0.44 per cent in 2000-01 and 0.58 per cent in 2001-02. However, it accounted for 99.60 per cent of the volume in 2002-03. Out of a total volume of Rs 10 lakh, Home Trade accounted for Rs 9.96 lakh in the current year.

Banks barred from holding
G-Secs in physical form

MUMBAI: RBI has finally plugged a major loophole which led to the G-Secs scam. Recent fraudulent transactions in guise of trading of G-Secs in physical form by some co-operative banks along with brokers, RBI has made it mandatory for RBI-regulated entities to hold G-Secs only in dematerialised form. No further transactions by a RBI regulated entity should be undertaken in physical form with any broker firm with immediate effect, RBI said in a statement. All entities regulated by RBI (including FIs, primary dealers, co-operative banks, regional rural banks, local area banks) and non-banking financial firms should necessarily hold their investments in G-Sec portfolio in subsidiary general ledger with RBI. They can also hold their investments in constituent SGL with a scheduled commercial bank or state co-operative bank or primary dealer or FI or sponsor bank and SHCIL or in a demat account with depositories. (ENS)

The price of the scrip was inflated through circular trading as “promoters wanted to show liquidity of the Home Trade stock which was then hypotheticated as a collateral security to co-operative banks,” he said, adding, “Sebi should take immediate action against PSE executives who allowed circular trading in the scrip.” In fact, there was no trading in any other scrip on PSE this year. “In last 7-8 months, there was no trading activity of any other share at PSE except Home Trade. The firm used the exchange just to show liquidity. With the help of circular trading, Agarwal rigged the prices of the scrip in trading. This was done purposely as it wanted to show liquidity in the scrip which was then hypothecated as a collateral security to co-operative banks,” he said. It had approached BSE for listing but exchange authorities had turned down the request.

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