Importantly, over the last year, somebody has mailed over 30 letters alleging impropriety, inaction and worse by Sebi’s surveillance department. Each neatly typed letter is sent to multiple government authorities and mentions at least one specific case of price manipulation. All the letters have a name and an address (but never a telephone number), since the sender is probably aware that anonymous letters are ignored by vigilance agencies.

While the allegations against top Sebi officials may be unjustified, the stocks mentioned in the letters begged for detailed scrutiny. Sebi has spent a lot of time to establish that the names and addresses mentioned in the letters are fake. But what about the market manipulators mentioned in the letters?

I decided to re-examine all the 30 odd letters I have received. I find a May 26,2006 letter points to rampant manipulation of eight real estate stocks, where some regulatory enthusiasm would clearly have had a cooling effect. One of these was Anantraj Industries, which had made a record of sorts by rising 6,000 per cent in the 18 months from May 2005 to December 2006. Can this entire surge alone be attributed to a booming realty and construction sector? A June 15 letter again points to the rise in Anantraj industries from Rs 25 to Rs 232 during a short span of time without any significant change in fundamentals. A third letter in August mentions it again.

Then in September 2006, the writer points to the antics of Manish Marwah and two others. This letter is addressed to the finance minister and says, “Your timely action would restore the confidence of investors in the market”. On October 14, 2006 another missive links Manish Marwah specifically to Atlanta Ltd and mentions the grey market operation in the IPO as well as the fact that it was almost entirely subscribed to by Marwah and the promoter group. The shares were listed on September 26, 2006, making the information extremely timely. Sebi’s order last week, sketching the movement of issue proceeds bears this out. On December 1, 2006 there is yet another warning about Atlanta — this time pointing out that the scrip has risen to Rs 850 in just 25 trading sessions. It says this is a perfect case for “vanishing company” in the future.

... contd.