The Sebi order reports that Atlanta shares rose from the offer price of Rs 150 to Rs 1,446 on January 17, 2007, during which the company made a series of positive announcements to justify the price manipulation and raised another Rs 85 crore through the issue of convertible preferential warrants. It also says that the promoter holding after this would be as high as 73 per cent.

Given this saga of warnings, it is amazing that price manipulation was allowed to continue, without a single warning signal from the regulator until the February 22, 2007 order. And it is ironical that the order itself was finally issued when realty stocks have already begun to lose their sheen.

Astonishingly, Sebi’s website shows a January 2002 investigation into Manish Marwah’s dealings in shares of Sun Infoways Ltd. This investigation was wound up in June 2006, without Marwah replying to the charges against him, apparently because there is “no proof of service of summons available on record”. Is this a reflection of how Sebi uses market intelligence and tracks market activity? Now that Sebi has identified 14 entities connected with Manish Marwah, will its Integrated Market Surveillance System quickly provide details about other activities so that regulatory action is timely and meaningful?

The Sebi order also raises questions about whether Sebi has lost its credibility as a market watchdog. Even after its high profile action in the multiple application scam, IPOs continue to be routinely ramped up on listing day. Last Thursday, Ahluwalia Contractors, which issued its shares at Rs 54 had soared to Rs 611 on the day of listing. This is a trend seen in Nissan Copper, Ashtavinayak Cine Vision and AI Champdany. Does Sebi plan to act?