The Securities & Exchange Board of India (Sebi) will conduct in May personal hearings of the six Calcutta brokers show-caused for allegedly indulging in illegal carryforward trading.
The regulator will allow the brokers -- Sonthalia & Company, Prudential Stock Broking Services, Subhash Pachisia, Vinod Kandoi, Ashok Poddar and Prema Poddar -- to defend themselves before deciding on penalties.
Sources said a Sebi team will be in Calcutta on May 20 for the personal hearing.
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The team is likely to to review the papers and data on the basis of which the members have been indicted, and allow the six brokers to defend themselves against charges levelled.
Some Calcutta Stock Exchange members feel the visit could inspire a few frowns. Bear hammering at the Reliance Industries counter had triggered the Sebi move to inspect a host of brokers in Mumbai, Calcutta and Pune early 1996.
Sebi officials had decided to initiate action under the provisions of the Sebi (Stock Broker & Sub Brokers) Regulation, 1992, as also under the provisions of Regulation 4 of the Sebi (Prohibition of Fraudulent & Unfair Trade Practices) relating to Securities Markets Regulations, 1995.
Subsequently, the watchdog had sent show-cause notices to the brokers in Calcutta and had superseded the governing board of the Pune Stock Exchange over the issue.
Earlier, Sebi's indictment of Pachisia, a member of the CSE governing board, in carry-forward deals had caused a stir among the bourse top brass. Pachisia resigned from the post of vice-president soon after.
Sources close to those indicted by Sebi targue that the guidelines do not clearly define the nature of deals that can be deemed as unauthorised carry-forward transactions.
Deals (purchase or sale) with the same broker for the same scrip on the same day or the following day have not been specified as carry-forward transactions as per Sebi guidelines, a CSE broker said.