Until February 22, 2007 Manish Marwah was a name known only to a close group of market participants as someone associated with the soaring prices of several shares. Interestingly, senior finance ministry officials were also making inquiries about Marwah’s market activity as far back as February last year. A year later, the Securities and Exchange Board of India’s (Sebi) order in the Atlanta Ltd, confirmed that this was indeed one of the many scrips that Manish Marwah has been moving vertically upwards with impunity.

Still, Sebi does not give Marwah star billing — his name figures only after the promoters of Atlanta. The Sebi order itself appears to be extremely meticulous. It contains a chart depicting the precise links between the promoter group and market operators as well as the flow of funds between them. However, from a larger market perspective, the order seems pointless, especially since it was announced in a week when realty and construction company shares have dipped between 20 to 35 per cent.

While Sebi conducted its slow investigation, Marwah’s businessmen cronies were ramping up the share price, making false announcements about business developments, diverting money raised from the public, misleading investors and making a mockery of Sebi’s disclosure and information dissemination rules. The Sebi order calls it, “abuse of the stock exchange mechanism, the listing agreement and regulations related to preferential issue of security to unfairly maximise their wealth at the cost of the lay investor”.

Atlanta Ltd, is a construction company that has changed its name and profile several times. Its actions, as documented in the Sebi order, prove what this column has repeatedly argued — that disclosures alone are meaningless unless stock exchanges verify their claims. There have been specific instances of companies suppressing negative news and claiming false positive developments. In a volatile market, where companies raise and transfer money very quickly, meticulous investigation is futile if it is not timely.

... contd.