SEBI lifts ban on 100 entities in Bank of Rajasthan case

Our Bureau Updated - November 20, 2017 at 07:38 PM.

‘No allegation as to any price or volume manipulation by promoters'

The Securities and Exchange Board of India has lifted the ban on 100 entities related to the promoters of Bank of Rajasthan (BoR) from dealing in the securities market. SEBI had banned these entities for allegedly violating a number of rules, including the takeover norms, and indulging in fraudulent trade practices.

In the second week of March 2010, it banned these entities saying that the promoters had indicated that they were reducing their stake in Bank of Rajasthan from 44.71 per cent to 28.61 per cent to comply with an RBI directive but they — the Tayals – had actually increased their stake to 55 per cent.

Not grave

“I am of the opinion that such an offence (holding in the bank being camouflaged) would have been considered as very serious or fatal if the wrongful disclosures would have led genuine investors into trades that would eventually expose them to much greater risk.

“I have noted that there is no allegation as to any price or volume manipulation by the promoters. Therefore, I am of the opinion that purely from a securities market point of view, the severity of the offence could be considered not very grave,” said Mr Prashant Saran, Whole-time Member, SEBI, in his order.

On concerns about the entities continuing to operate in the securities market again, the order said: “There is no allegation that the entities indulged in any other kind of manipulation in the securities market. Therefore, it would be reasonable to assume that on the basis of the material available on record, there is no indication of a likelihood that the entities shall indulge again in wrongful disclosures of their holdings of which they have been charged with in the first place.”

It may be recalled that BoR had been amalgamated with ICICI Bank and the BoR shares held by investors have already been swapped for ICICI Bank shares.

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Published on March 27, 2012 17:06