June 21, 1999
PR No. 138/1999

Investigations, Enforcement & Surveillance Department

Investigations were undertaken by SEBI into the alleged price manipulations in the scrips of BPL, Videocon and Sterlite in the wake of payment crisis faced by certain brokers in June 1998. During investigations the functioning of the exchanges was also examined. Pursuant to this show cause notices were issued to President , Vice President and Executive Director of BSE. After giving proper opportunity of being heard action was taken by SEBI against the then President, BSE, Shri J. C. Parekh, directing him to relinquish the office of President. Meanwhile, the then Vice President of BSE, Shri Rajendra Banthia had also resigned. Further proceedings in his case are under process. Shri R. C. Mathur, Executive Director was given opportunity of being heard. After taking into account the submissions made by Shri Mathur, SEBI concluded that Shri Mathur failed to discharge his duties and responsibilities in an objective and professional manner. Further, it was found that his conduct in the context of developments related to these scrips was detrimental to the transparency, integrity and fairness of the system. Meanwhile, Shri Mathur has resigned from the office of the Executive Director with effect from 24th April 1999. Therefore, no directions are being given by SEBI asking him to relinquish the office of the Executive Director. However, SEBI has passed an order under Section 11 and 11B of the SEBI Act, 1992 read with Securities Contract (Regulations) Act 1956 to the effect that Shri Mathur shall not be eligible to become an office bearer of any Exchange and to hold any public position in any capital market related public institution for a further period of 3 years. This order comes into effect immediately.