Enforcement Directorate asks Sebi to probe 2G firms for insider trading

Photo: Reuters
The Enforcement Directorate (ED) has sought from the Securities and Exchange Board of India (Sebi) share transaction details of companies linked to the 2G telecom spectrum scam. It has asked the market regulator to probe these companies under its insider trading rules.

According to sources, the probe agency is examining whether these companies were tipped off in advance as the stocks of these companies rallied one day before a Delhi court pronounced the verdict in the 2G case, which was on December 21.

Confirming the development, an ED official said an inquiry letter had been despatched to the market regulator seeking specific information on movement of 2G scam-related companies ahead of the pronouncement of the verdict. Sources said the ED also asked the regulator to look into the matter under insider trading norms.

A special Central Bureau of Investigation court had acquitted all key accused in the case, including former telecom minister A Raja and DMK Member of Parliament Kanimozhi, in the Rs 30,000-crore 2G spectrum allocation scam case.

Shares of Reliance Communications, DB Realty and Unitech had gained 35 per cent, 5 per cent and 4.4 per cent, respectively, on December 20 over December 19. On December 21, all three shares and those of Sun TV and Videocon, too, were up between 3.8 and 20 per cent over the previous day. 

Sources said the market regulator has initiated preliminary investigations based on the ED’s letter and has sought trade data of all companies concerned.
“Trade positions of individuals and promoters are being looked into and accordingly a report would be submitted,” said a source privy to the development.According to him, the market regulator would also look into the role of individuals associated with the 2G issue and who might have traded on the information.

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