I hope the below is the reson for SMALL CAP and MIDCAP correction
Source - Financial Express
Manipulation: Trading in six companies suspended, 11 CSE brokers banned
from the market
MUMBAI, SEPTEMBER 29 : Market regulator Sebi has cracked down on six
penny stocks following huge manipulation in their prices. The regulator
has suspended trading in Prime Capital Market Ltd, Subh Laxmi Projects
Ltd, Global Capital Market Ltd, Bankam Investments Ltd, S T Services Ltd
and Amluckie Investment Co after it noticed abnormal rise in their share
prices.
Sebi, which is probing the price rise in 50 penny stocks, has also
banned 11 brokers from the Calcutta Stock Exchange from dealing in stock
markets till further orders. The banned brokers are: Sanju Kabra, Shivam
Stock Broking Pvt Ltd, DB & Co, Rajendra Prasad Shah, Badri Prasad &
Sons, M Bhiwaniwala & Co, Ram Mohan Sarda, A V Shares & Stock Brokers
Pvt Ltd, Shyam Lal Sultania, Ahilya Commercial Pvt. Ltd and S
Jhunjhunwala & Co.
Similarly, Sebi has barred the promoters and some clients of IFSL Ltd
from trading in the company's shares. It has asked some top brokers,
including India Bulls and Fortis Securities, not to deal in the shares
of IFSL which witnessed a huge price rigging.
As for the penny stocks, in its order dated September 29, Sebi said the
artificial price rise in these six stocks resulted into gains to some
set of brokers and loss to other set brokers, which may be instrumental
in legitimising certain financial gains.
As the price of the above shares have gone up significantly, there is a
possibility that investors without having proper information about the
companies concerned may be lured to these illiquid shares and may get
trapped in the process, which is highly detrimental to the interest of
the investors, Sebi said.
According to Sebi, in these six companies - all of which are listed on
the CSE, one of which is listed also on the BSE, and another listed
additionally on Jaipur and Ahmedabad Stock Exchanges - the brokers have
followed a common modus operandi of artificially enhancing the price and
creating false volumes through continuous self deals executed on the
same terminal and cross deals amongst themselves, thereby not only
enriching themselves but also aiding and abetting the process of
legitimising the gains.
Besides, the companies have recorded poor or negative financial
performance and have not bothered to file up-to-date financial
statements with the CSE. "Such acts by the brokers pose a serious risk
to the stability and settlement system of the stock exchange," Sebi
said.
Prime Capital Market: The share price of the company rose from Rs 14 to
Rs 280.40 between March 17, 2005 to September 15, 2005 i.e. a price rise
of 1903% in 6 months. The latest financial results available are only
for the year ended March 2003. From the financial statements filed with
the CSE for the 2002 and 2003 fiscals, it's seen the company had no
sales during the above period and had incurred net losses of Rs 4 lakh
and Rs 6 lakh respectively indicating negative performance.
Subh Laxmi Projects Ltd: Share price rose from Rs 21.30 to Rs 248.50
between March 17, 2005 and July 14, 2005 -- a price rise of 1067% in 4
months. From its statements, for 2004, the company did not earn profit.
Bankam Investments Ltd: Share rose from Rs 2.10 to Rs 16.85 between June
09, 2005 and Sept. 6, 2005 - a price rise of 702% in 3 months. For 2004,
the company had incurred a net loss of Rs.11 lakh.
ST Services Ltd: Shares rose from Rs 12.10 to Rs 96.50 between March 18,
2005 to September 16, 2005 i.e. a price rise of 698% in 5 months and 28
days. For 2004, the company had sales of Rs 39 lakh (Rs 88 lakh during
2003) and had incurred a net profit of only Rs 1 lakh (Rs 1 lakh profit
in 2003).
Amluckie Investment Co: Share price rose from Rs 95 to Rs 298.50 between
April 1, 2005 to August 23, 2005 i.e. a price rise of 214% in a span of
4 months and 32 days.
Cross Check all the msgs before investing or selling.
From
Arvind.K
