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Monday, December 8, 2008

Manipulators also feels the heat of meltdown

According to the latest intelligence report from the government which tracks the economy and markets, very few such operators have been able to make profits in the steep downturn by using short-selling and buy-back routes. What’s more, given the liquidity squeeze, a new kind of blame game has started between promoters and manipulative brokers who had an eye on jacking up stock prices of some companies. Interestingly, the report has also cited instances where promoters of companies have accused such cartels of selling shares in their companies without their knowledge. For instance, the promoter of a Mumbai-based education services company has accused one such cartel of selling a huge quantity of the company’s shares in mid October without his knowledge, the report said.
Also, the report has mentioned the names of two companies, one each in steel and real estate, as those in deep financial strait. According to the report, the Mumbai-based diversified conglomerate has already incurred losses to the tune of $1.5 billion in its steel business alone. It has further said that the group is starved of funds to develop new businesses. Similarly, the report has pinned the blame of the hammering down of stock prices of a top real estate company as the handiwork of a large business house in India for allegedly taking over the company itself. It has also warned how a few Ahmedabad-based stock manipulators, in collusion with promoters, are planning to shore up the prices of five companies.

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