The Securities and Exchange Board of India today said it has initiated a probe into the alleged leak of 37 companies being brought under enhanced surveillance before stock exchanges made the list public.
It was alleged that stocks that were to be included in Additional Surveillance Measure – a category formed by SEBI to check market manipulation – were leaked to market operators before the official announcement made by stock exchanges.
The BSE, on May 31, announced that it will bring as many as 37 stocks including Bombay Dyeing and Manufacturing Company, Dilip Buildcon, HEG, Rain Industries, Radico Khaitan and Apex Frozen Foods under the ASM framework from June 1. The share price of several such stocks plunged before the names of the companies were made public.
“It has been reported in a section of the press that a list of stocks which were to be subjected to ASM was leaked prior to announcement by stock exchanges on May 31, 2018, SEBI said in a statement. “SEBI has taken note of the same and has ordered an inquiry into the matter.”
The ASM framework was introduced in consultation with stock exchanges as part of enhanced surveillance mechanism. The framework is mainly aimed at checking any abnormal rise in stock prices that do not commensurate with the financial health of companies. The applicable price band for the stocks being shifted the category is 5 percent or lower.