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Anand Rathi misused office, says Sebi

The Securities and Exchange Board of India has said that former Bombay Stock Exchange president Anand Rathi misused his position to obtain price-sensitive information from the surveillance department on positions taken by broking members, including Credit Suisse First Boston and Kotak Securities.

In its interim report on the stockmarket scam, Sebi said that Rathi had confirmed that he had enquired into the institutional trades, trades by members and transactions in particular scrips in the index.

"It is evident that Rathi called the surveillance department of the BSE on March 2 and had a conversation with Arun Dhanawade, assistant general manager in the surveillance department," the report said.

Rathi had asked for positions of various selling members in scrips like Infosys, Satyam, Reliance, Wipro and Global Tele, which carried not only weightage but were also indicator of price trend in the IT stocks, it said.

Although Rathi claimed that the information was not price-sensitive, the report said, "This information is very price-sensitive and if it had been not then this would have been disclosed to the whole market and the surveillance department officials has confirmed Rathi's conversation."

In the on-line trading system of exchanges, the identity of the counterparty to the trade is kept cofidential as it matters in affecting market sentiments, the report said.

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