Securities Appellate Tribunal turns down Shankar Sharma plea

The Securities Appellate Tribunal (SAT) on Friday upheld a Securities and Exchange Board of India’s order barring Shankar Sharma, vice chairman and joint managing director, First Global Stock Broking Pvt Ltd, from the securities market for one year with immediate effect.

Sharma, however, said the order was “not relevant”. “I have not bought or sold any stock for the last ten years and have no intention, irrespective of any Sebi/SAT order, of buying or selling any stocks in India, ever,” he replied in a mail to DNA.

He added that the passage of time since the affair had leeched the action of any significance. “The Sebi order carries no meaning for us. It’s a nearly ten-year-old, trivial matter, and has lost all relevance now”. Sebi had in February last year barred Sharma for synchronised trading and other malpractices in 2001 in shares of 10 companies — Global Telesystems, HFCL, DSQ Software, Zee Telefilms, Wipro Technologies, Satyam Computer, MTNL, SBI, Infosys, and Sterlite Opticals.

Synchronised trading is a form of stock manipulation when someone buys and sells the same stock around the same time to increase the volume.

Sebi said Sharma had carried out trades in his proprietary account through broker Bang Equity Broking, which synchronised with the orders placed by Vrudhi Confinvest, a company owned by Sharma and his wife Devina Mehra.

SAT had in February upheld the Sebi order barring Sharma. Subsequently Sharma filed an appeal in the Supreme Court and a review petition with SAT citing errors in the records and arguments in its order.

While the appeal in the Supreme Court turned down the appeal earlier this year, SAT has now dismissed the review petition.

During the case, the counsel for Sharma had argued that the action against him was part of a ‘witch hunt’ initiated after Tehelka exposed corruption in defense dealings in 2001. The scandal had severe political repercussions with the defence minister George Fernandes resigning because of it, although he was later reinstated.

Sharma held a 14.5% stake in Buffalo Networks, the owner of Tehelka.

The tribunal dismissed the allegation suggesting that gathering of evidence had started before the Tehelka scam broke out.
Meanwhile, Sebi had also denied foreign institutional investor status to First Global UK saying that the order against Sharma, who is director on the company’s board, makes the organisation unfit for registration.