MINISTER OF FINANCE (YASHWANT SINHA)
(a) to (g): A statement is laid on the table of the House.
STATEMENT REFERRED TO IN REPLY TO LOK SABHA
STARRED QUESTION NO. 486 FOR ANSWER ON 20th April,
2001 RAISED BY SHRI RAGHUNATH JHA AND SHRI
RAMJIVAN SINGH REGARDING STOCK MARKET CRASH
(b) & (b) On 27th February, 2001 i.e., pre-budget, the
BSE Sensex closed at 4069.68, NSE Nifty closed at 1295.55
and the CSE Fifty index closed at 128.94. Thereafter, the
movement of the BSE Sensex, NSE Nifty
and the CSE Fifty was as follows:
DATE SENSEX NSE NIFTY CSE INDEX Close Value Close Value Close Value
27-FEB-01 4069.68 1295.55 128.94
28-FEB-01 4247.04 1351.40 132.95
01-MAR-01 4271.65 1358.05 137.05
02-MAR-01 4095.16 1306.35 133.92
05-MAR-01 3998.12 1271.45 130.50
07-MAR-01 4046.89 1290.50 130.61
08-MAR-01 4056.94 1292.85 132.03
09-MAR-01 3881.96 1254.75 129.40
12-MAR-01 3767.89 1197.95 125.23
13-MAR-01 3540.65 1124.70 117.60
As can be seen there was a substantial
fall on 2.3.2001 and thereafter the downward trend continued.
(c) In the context of market movements in late
February and early March there were apprehensions
about stock price manipulation by certain entities.
SEBI has submitted a preliminary report in this
regard to the Ministry of Finance on April 15, 2001.
(d) & (e) The Central Board of Direct Taxes
has intimated that search actions were conducted on
23.3.2001 at the business and residential premises
of the following brokers:-
2. Ketan Parekh 3. Nirmal Bang 4. Anand Rathi 5. Rakesh Jhunjhunwala 6. Shanker Sharma 7. R.S. Damani
The details of seizures in consequence of search operations are mentioned as under:-
Unexplained Cash Jewellery
Ketan Parekh Rs. 0.60 lakh
Anand Rathi Rs. 6.38 lakh
Rakesh Jhunjhunwala Rs. 9.50 lakh
R.S. Damani Rs. 3.00 lakh
Jewellery
Anand Rathi Rs. 6.38 lakh
Other assets: Shares
Anand Rathi Rs. 14.77 lakh
Apart from the above, some incriminating documents have also been seized.
The Central Bureau of Investigation has intimated
that on the basis of a specific complaint from
the Chief Vigilance Officer, Bank of India,
Mumbai, a case RC. 3/E/2001-BSFC/MUM was registered
against Ketan Parekh and 10 others
for defrauding Bank of India, Stock Exchange Branch,
Mumbai to the tune of Rs. 137 crore by
using the pay orders of Madhavpura Mercantile Co-operative
Bank ltd., Mandvi Branch, Mumbai. Searches were
conducted at the official and residential premises of
Ketan Parekh and associate firms in Mumbai. Several
incriminating documents pertaining to the
case were seized. No cash or jewellery was seized.
(f) and (g) : Government has announced the following
measures to improve institutional mechanisms and
trading practices in the stock markets:
(k) demutualisation of stock exchanges by which ownership,
management, and trading membership would be
segregated from each other. This would help towards:
· further professionalisation of the management
of the exchanges and elimination of conflict of interests;
· improving adherence to the best practices of Corporate Governance;
· enhancing the ability of stock exchanges to raise
funds from the market to modernise the exchanges and provide better investor service.
(ii) extension of rolling settlement to
200 category ``A` stocks in Modified
Carry Forward Scheme, Automated Lending and
Borrowing Mechanism and Borrowing and
Lending Securities Scheme by July, 2001.
Following this, SEBI has directed
all stock exchanges as follows :
· All scrips which are included in the ALBM/BLESS/MCFS in
a stock exchange will be traded only in
the compulsory rolling settlement on a
nationwide basis i.e. on all
stock exchanges from July 2, 2001.
· In addition, if there is any scrip which is
included in the BSE 200 list, but not
covered by the above list, will also be
included in the compulsory rolling settlement on
a nationwide basis.
