A large number of listed firms, including top blue-chips, are facing heat of the stock market authorities for sudden surge in their share prices and trading volumes as also for ‘speculative’ information leaks leaving investors at large in the lurch.

In just about one and a half months since the beginning of this year, the stock exchanges have sought ‘clarifications’ from at least 19 Sensex blue chips including giants like Mahindra and Mahindra, Hindustan Unilever, SBI, Coal India, Wipro, Hero MotoCorp, ICICI Bank, Cipla and L&T.

Beyond Sensex companies also, at least 100 such notices have been issued so far in 2015.

These include Pipavav Defence, Suzlon Energy, Claris Life, IDFC, Adani Enterprises, IPCA Labs, REI Agro, MRF, Punj Lloyd, Blue Dart, PVR, IRB Infra and Piramal Enterprises.

Such ‘clarifications’ have been sought on ‘sudden’ rise or fall in share prices and trading volumes, as also on news articles published about them about key business developments with implications for share prices, without first informing the investors at large through the stock exchange platforms, as mandated by the regulations.

In most cases it has been observed that the companies either delay their responses to the notices issued by the stock exchanges, or their replies have not been satisfactory and limited to pro—forma sentences like “we are not aware about the issue” or “we do not comment on speculation”.

The exchanges have flagged these cases for further action by the capital markets regulator SEBI, whose Integrated Surveillance Department (ISD) is looking into these matters.

Further investigation by the regulator and the exchanges have also showed that the ‘speculative’ news reports in many cases have come true at a later stage, which has been within a day or two in a few instances, despite the companies concerned having denied “any knowledge” about any such developments while replying to the clarificatory notices.

At least two major PR agencies are also under scanner for selective leak of information that could benefit a few.

The ISD receives information from a number of sources such as media scanning, IB reports, SEBI’s investor complaint portal SCORES, STRs (Suspicious Transaction Reports of various financial institutions) and exchanges, in addition to the regulator’s surveillance and data warehouse systems. The number of such alerts stands at about 1,000 so far in 2015.

Explaining the process, a senior official said the information is aggregated across exchanges and analysed by dynamic system based parameters and pattern recognising modules which throw up alerts for first level processing.

These first level alerts are further screened by a central processing team, which filters out cases for second level scrutiny. The shortlisted cases are comprehensively analysed by stock exchanges and the ISD for ascertaining any prima facie violations warranting immediate action.

About 100 stocks have been short-listed so far this year for further examination after initial processing, while further action has been initiated in 20-25 cases.

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