Nirmal Kotecha Case – a laudable move by SEBI

The Securities and Exchange Board of India (SEBI) by its order dated 23^rd April 09, passed against Nirmal Kotecha, in the matter of Pyramid Saimira, is a laudable one, but this indicates a finger on many such stocks, in which, pure speculative game is being played by the operators. This is with a view to trap the retail investors ultimately.

Infact, this game is being played more in the recently listed stocks, where not much financial datas of the company are available and even the public float of these companies get easily cornered by the operators in nexus with the promoters and management. We have seen huge momentum having played in the stocks like Aishwarya Tele, Edserve Soft, First Winner, Niraj Cement, NuTek India, Usher Agro and Resurgere Mines, where, prices in the secondary market were pulled up artificially and now finally all the stocks are held by the retail investors, at a very high price.

Even now, some of the stocks are still ruling artificially and at very unrealistic and high prices which are Alkali Metals, Anu’s Lab, Austral Coke, Allied Digital and Vishal Info. But what we generally see that even retail investors cum traders, get lured by this kind of rise and volatility and tempt them to indulge in it, with this confidence, that, they are smart enough to make quick bucks and get out of it. But it results in those traders getting converted into investors, due to fall in prices.

If we read the detailed order of SEBI in case of Pyramid Saimira, total modus operandi has been elaborated in it. If one can also track the volume in above stocks, mentioned by us, it can easily be established and found that many such fronts and conduits are working for operators like Nirmal Kotecha.But this kind of investigations and analysis is possible either for SEBI or for stock exchanges.

Infact, there are about 10-12 operators active in the markets on the lines of Nirmal Kotecha, who extends their expertise and operational support, by taking the assistance of Flls, mutual funds, brokers and benami accounts to trade to trade on their behalf to rig up the price.

But all the plays of those operators can get sabotaged, if, a trader remains away from such stocks.

BY S.P.Tulsian