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Business News/ Companies / News/  Bhushan Steel promoters barred from securities market
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Bhushan Steel promoters barred from securities market

The promoter entities were barred for alleged manipulation of stock prices through the preferential allotment route

On BSE, Bhushan Steel fell 6.25% to touch a low of `84.75, before recouping some of the losses to close at `89.70, down 0.77% from its previous close of `90.40. Premium
On BSE, Bhushan Steel fell 6.25% to touch a low of `84.75, before recouping some of the losses to close at `89.70, down 0.77% from its previous close of `90.40.

Mumbai: Shares of Bhushan Steel Ltd fell on Monday after the capital markets regulator barred some of its promoter entities from accessing the securities market for alleged manipulation of stock prices through the preferential allotment route.

On BSE, Bhushan Steel fell 6.25% on Monday to touch a low of 84.75, before recouping some of the losses to close at 89.70, down 0.77% from its previous close of 90.40. The benchmark Sensex gained 1.21% or 329.95 points to close at 27,701.79 points.

In two separate orders issued late Friday, the Securities and Exchange Board of India (Sebi) barred nearly 260 entities—including Brij Bhushan Singal, Neeraj Singal, Ritu Singal and Uma Singal—from the securities market until further directions.

While Brij Bhushan Singal is chairman of Bhushan Steel, Neeraj Singal is managing director, according to information available on the BSE website.

Ritu Singal is the wife of Neeraj Singal, according to the latest annual report of the company. Uma Singal is the wife of Brij Bhushan Singal.

Collectively, these entities hold nearly 48% in Bhushan Steel, according to the shareholding data for the quarter ended 30 September.

According to the Sebi order in the matter of First Financial Services Ltd, several entities who were allotted shares in the preferential allotment, including the “Singal family", indirectly received the funds back from the company.

“Events prima facie indicate that money received through preferential allotment were again routed to the same source i.e. Singal family. Inquiry also revealed that members of Singal family have been preferential allottees in such type of companies which have a history similar to that of First Financial.

From the above facts, it prima facie emerges that a number of entities who were the preferential allotees in the present case, were regularly investing in companies for namesake and the money invested by them in these companies was being returned to them indirectly,’ says the Sebi order.

In another order in the matter of Radford Global Ltd, Sebi has said that the four members of the Singal family were connected to the company and were allotted a total of 1.9 million shares or nearly 21% of the total number of shares allotted on a preferential basis.

An e-mail seeking comments from Bhushan Steel was not immediately answered.

Sebi had undertaken a preliminary inquiry into transactions in shares of First Financial Services between 15 May 2012 and 31 March 2014, when its price rose from 5 to a high of 296, before falling to 7 after a stock split.

The Sebi probe found that there were two sets of entities involved, with one pushing up the stock price when the shares allotted in preferential allotments were under the lock-in period and the other group acting as buyers to provide exit to preferential allottees by creating artificial volumes.

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Published: 22 Dec 2014, 05:00 PM IST
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