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May 14, 2002 | 1205 IST
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Sebi seeks information from stock exchanges on brokers

Janaki Krishnan

The Securities and Exchange Board of India is on its guard to prevent the gilts scam from having an impact on the equity market.

The investigative wing of Sebi reacted to reports that the money from the gilts markets could be circulating in the equity market.

It has sought details from the stock exchanges regarding brokers who have been active in the last five or six months.

The suspicion is that the money made in the gilts market has been invested in equities. Sources said that a couple of months back there was a steep and unaccountable rise in the prices of some second and third rung technology stocks.

"The information we have received points to diversion of money from the government securities market to boost the prices of these tech stocks. The gilts market trading rose to new heights last year and there could have been diversion of funds to the equity market," sources said.

Incidentally, a well-known equity market broker -- known for his bullishness on NIIT -- is also known to be under the Sebi probe as he is rumoured to have been involved in dealings with Home Trade.

In the aftermath of the market crisis in March last year, many brokers associated with Ketan Parekh and others operating in the fringes went out of business or were forced to scale down their operations.

Sources said that the brokers involved in the gilts scam are an entirely different set and have so far been successful in maintaining a low profile in the market.

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