Sebi probes companies, global banks for round tripping

New Delhi: Capital market watchdog Sebi is probing at least three large global banks and many Indian companies for alleged round tripping of funds by way of multi layered transactions. The Securities and Exchange Board of India (Sebi), which has been looking into the matter since late 2013, has issued showcause notices to companies, sources said. Swiss banking majors UBS and Credit Suisse as well as British financial services giant HSBC are also believed to have come under Sebi’s scanner, they added. 

 

A senior official declined to identify the entities being probed, saying it could come in the way of investigations. He also said irregularities have been noticed in the share prices of 15-20 companies and it is not necessary that the firms or their promoters are involved in wrongdoing. He noted that not all names reported in the media are correct and there are many more that are under the scanner. 

 

Some portfolio managers at some banks, which have a significant presence in the Indian financial markets, could have helped clients route money back into the country as foreign funds using investment vehicles across jurisdictions. “UBS does not comment on market speculation or rumour and, in any case, considers all correspondence with the regulators confidential,” Hong Kong based spokesman Mark Panday said. Credit Suisse declined to comment, saying the matter is market speculation. 

 

An HSBC India spokesperson declined to comment. The regulator feels some promoters may have been involved in such practices to boost share prices of their companies by showing a strong FII interest, sources said.  Sebi is coordinating with regulators and agencies in India and abroad in this case, where some well-known companies and industrialists are suspected to be involved, they added.