A watch is being kept on listed companies to see if they are complying with capital market regulator Securities and Exchange Board of India (SEBI) rules or trying to manipulate the market to serve vested interests, its chief said on Friday.
“Some companies are trying to manipulate the market by avoiding paying long-term taxes,” SEBI chairman Upendra Kumar Sinha told a news channel on Friday, adding the watchdog did not hesitate to act against some of the largest corporates found violating rules.
“We notice even a slightest attempt to manipulate (the market). As we caught (some companies) in wrong-doings in their IPOs (initial public offerings), no manipulation is possible henceforth.”
To prevent manipulation from the beginning, SEBI introduced call option to buy shares at an agreed price on the opening day of any company’s IPO.
“As a pro-active and sensitive regulator, we act against any company if we anticipate something going wrong (with it) even before action is sought,” Sinha said.
For instance, SEBI allowed some start-ups to list their shares on the exchange for trading even before there was demand for their shares, he said.
Claiming that there was no political pressure on the regulator, the former IAS officer said the it had worked with many governments earlier and maintained its stand.
“Even the Supreme Court (on July 6) upheld our order to regulate GDR (global depository receipts) that are raised by Indian companies and listed on overseas exchanges like Germany.
Noting that it was unfair to assume its crackdown on capital markets had impacted filing of red prospectus for IPOs, Sinha said on the contrary, filing for IPOs had gone up during the last two years.
“As market watchdog, we facilitated IPOs, fund-raising, electronic filing by them,” he said.
Observing that corporates would invest when the macro-economic climate was good, Sinha said traditional way of raising money to manipulate (stock) markets had gone away.
Denying that he was unfair to Indian conglomerate Sahara in dealing with its violation of rules, he clarified that even the Supreme Court had upheld his actions against the company for defaulting on paying back its investors.
“As a regulator, we deal with matters in a very dispassionate way. It is mischievous allegation that I had acted against Sahara in a partisan way,” Sinha added.