These individuals and firms are over and above the 19 entities barred by Sebi (Securities and Exchange Board of India) from the securities market in an interim order last week, for their suspected role in pulling down the share prices of four mid-cap stocks.
As per the initial investigations, share prices of these stocks are suspected to have been hammered down by certain connected entities through persistent sale and purchase at prices much lower than their prevailing quotes, with an aim to shore up the holdings at lower valuations.
The modus-operandi is similar to those adopted by bear cartels, who first pull down the share prices of the companies by trading among themselves at low prices and later buy the same stocks very cheap at their beaten-down valuations, a senior official said.
The official said certain brokers and market analysts could also have been used to spread negative rumours about the companies to pull down their share prices, while the role of the promoters of rival companies was also being investigated.
Sebi has come across common threads between many individuals and entities who have sold or purchased large quantity of the stocks under review during the past few weeks.
Sources said the entities under Sebi's scanner are suspected to have typically sought to pull down the share prices right at the opening time of the markets, and their manipulative activities have generally coincided with negative rumours about the targetted companies.
The regulator is analysing records of suspected entities in all publicly-available documents, as also in the databases of Registrar of Companies (RoC), banks, stock exchanges and brokerage firms.
Besides, Sebi might also seek help from other investigation agencies for information like call-record details of the suspected entities, sources said.
In its interim order dated August 3 against 19 entities for pulling down share prices of four companies (Parsvnath, Tulip Telecom, Pipavav Defence and Glodyne Technoserve), Sebi had said that many of these entities were connected to each other and had common phone numbers or addresses in Kolkata.
A day later, Sebi Chairman U K Sinha told reporters on the sidelines of a conference in the national capital that the detailed investigations into the matter would be completed fast and actions would be taken against those found guilty.