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Sebi starts probes in 108 new case in FY14

PTI 18 Aug 2014, 12:58:19 PM IST
New Delhi: Capital market watchdog Sebi started probe into 108 new cases related to manipulations in the securities laws and completed investigation in 120 matters during the last financial year.

With this the total number of cases at the end of 2013-14 stood at 1,880, of which investigations into 1,659 matters have been wrapped up by the market regulator.

"During 2013-14, 108 new cases were taken up for investigations and 120 cases were completed compared to 155 new cases taken up and 119 cases completed in 2012-13," the Securities and Exchange Boards of India (Sebi) said in its latest annual report.

Of the 108 cases where Sebi had began probes in 2013-14, 62% (67 cases) pertained to market manipulation and price rigging as against 55% matters in 2012-13.

Besides, insider trading and violations of the takeover norms accounted for 12% (13 cases) and 5.6% (6 cases) respectively in 2013-14.

The remaining cases were related to manipulations in capital issue and other violations of capital markets norms.

"Since, several investigation cases involved multiple allegations of violations, water-tight classification under specific category becomes difficult," Sebi said in the report.

"Therefore cases were classified on the basis of main charge/violation," it added.

Meanwhile, of the 120 investigations finished by Sebi in 2013-14, market manipulation and price rigging cases accounted for 60.8% compared to 34% in the preceding financial year.

Insider trading accounted for 10.8%, capital issue violations (10%), takeover violations (5%) and other securities laws violations (13.3%), of the total investigations completed by Sebi in 2013-14.

After completion of investigations, Sebi initiates further penal action as per the recommendations made in the probe reports and as approved by the competent authority.

Types of regulatory actions include, suspension, warnings, adjudication orders where penalties are levied, advice letter and prohibitive directions.

In 2013-14, Sebi had imposed penalties on 619 entities while it had issued "administrative warning" to 304 entities.

Additionally, the market watchdog issued prohibitive directions against 270 entities in the last financial year compared to 168 such directions in 2012-13.

"These directions have the strong and salutary effect of deterrence and also act as an effective tool to deal with emergent situations requiring a timely and faster response," Sebi said in the report.

Overall, regulatory actions were taken against 1,436 entities in the last financial year by Sebi.

The market regulator began adjudication proceedings against 697 entities while it issued show cause notices to 142 entities in 2013-14.