Sebi suspends 12 CSE brokers

In a move to curb mala fide trade in penny stocks the Securities and Exchange Board of India (Sebi) today suspended 12 brokers of the Calcutta Stock Exchange (CSE). Besides the suspensions, it has also stopped trading in five scrips in the exchange.

This is the second major move by the regulator to curb speculative transaction at CSE after September this year. Sebi earlier suspended 11 brokers and stopped trading in six scrips.

Sources said that the brokers suspended for illegal trading are B Periwal & Co, Binoy Poddar, P K Agarwal & Co, Pramod Kumar Kothari, P Kejriwal, Santosh Kumar Kejriwal & Co, Dinesh Lodha, Ashis Stock Broking, Sunil Kedia, Muralilal Goenka, Shamlal Sultania and Ahilya Securities.

The scrips in which the trading was stopped included Adinath Bio Lab, Globe Stock & Securities, Goenkas Business & Finance, Coronet India NI.

The Sebi order issued says that all the brokers have followed a common modus operandi of artificially inflating price and creating false volume through self deal and circular trading. Regarding the scrips, Sebi said the companies had recorded poor financial results but not filed that with CSE - a clear violation of the listing norms.

The scrips suspended by the regulator earlier were Prime Capital Markets, Subh Laxmi Projects, Global Capital Market, S T Services and Bankam Investment. Earlier last week, the CSE warned 11 companies with a view to address the grievances of common investors.

The companies warned are IFB Financial, Dunlop India, Swil, Uniworth, Jenson & Nicholson, Incab Industries, BTW Industries, Rajasthan Gases, AMI Computers and Malanpur Steels.

"In each cases more than 15 complaints are pending for redressal. If they do not comply then we could even suspend the trading of these scrips," a top ranking CSE official said.