Capital markets regulator SEBI has barred 239 entities from accessing the securities market through an interim order in the matter of the IPOs of Eco Friendly Food Processing Park (Eco), Esteem Bio Organic Food Processing (Esteem), Channel Nine Entertainment (CNE) and HPC Biosciences (HPC) in the SME segment of the BSE. The interim order comes into effect immediately.
Commenting on the order, SEBI Chairman UK Sinha on the sidelines of the CII Mutual Fund summit in Mumbai said, “SEBI has a very effective surveillance system. We have been able to take action in a large number of cases. We got the information and also the alert from the SME platform. As a regulator we have to be continuously alert and we would like to assure you that we are doing that.”
BSE welcomes measureA statement from the BSE said “BSE welcomes the SEBI order.”
Noticing a huge rise in traded volumes and prices of these scrips between January 1, 2013 and December 31, 2014 (price of Eco rose by 6,265 per cent, Esteem rose by 3,150 per cent, CNE rose by 2,882 per cent, and HPC rose by 1,782 per cent), SEBI commenced investigations.
SEBI’s analysis of the companies’ financial statements showed that their net profit and earnings per share had been consistently decreasing from financial year 2012-13 onwards, that is, the period of sharp price rise in these scrips.