Sebi bars six brokerages from Nissan Copper scrip

The Securities and Exchange Board of India (Sebi) today barred six brokerage houses including the Ranbaxy-controlled Religare Securities, Dimensional Securities and Matrix Equitrade from dealing in the shares of Nissan Copper, even as it unearthed the re-emergence of multiple applications in the Nissan Copper IPO.

The regulator is also initiating action against merchant banker Keynote Corporate Services and registrar Bigshare Services Pvt Ltd to ascertain whether they have exercised due diligence in the allotment process.

Further, three foreign institutional investors (FIIs) "� Venus Capital Management, ITF Mauritius and VACUF "� are also under the Sebi lens to see if they were acting in concert in the alleged share price manipulation of Nissan Copper.

In an interim ex parte order, the Sebi also asked the Bombay Stock Exchange and the National Stock Exchange to withhold profits made by 40 entities/ clients in the stock in a separate escrow account. The regulator, however, asked the exchanges to release the funds and securities payout of December 29, 2006 and January 2, 2007 for others immediately.

The regulator's decision comes after it asked the bourses (on January 2) to freeze the payout in the Nissan Copper scrip and transfer it to the trade-to-trade segment following unusual price movements.

The Sebi said Nissan Copper, which floated its IPO at Rs 39 in December last year, saw an astronomical price of around 235 per cent of the issue price, which was unusual compared with the 16 other IPOs, which were listed in the recent past.

The other brokerages barred from trading in Nissan Copper are RSS Investments, Park Light Securities and H Nyalchand Financial Services.

The Sebi said its directive would come into effect immediately and it gave the persons/ entities 15 days to file their objections.

Pointing out the instance of multiple applications in the Nissan Copper IPO, the Sebi said it was observed from the list of retail allottees that 303 entities had the surname "Bhansali". Of these, about 288 entities gave five different addresses from Ahmedabad. Of the 288 allottees, 53 did not give PAN.

Similarly, Vinod Kumar Goyal, plant manager of the company who draws an annual salary of only Rs 1.68 lakh, got an allotment of 3 lakh shares in the employees' category. He subsequently transferred these shares to Forney Fund Advisors Pvt Ltd through off-market transaction.

Significantly, the Sebi said: "It was necessary to examine the conduct of intermediaries associated with the issue "� Keynote Corporate Services, Bigshare Services and concerned depository participants in order to ascertain whether they have exercised due diligence in the allotment process, opening of demat accounts etc., and, accordingly, necessary actions are being initiated."