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Indian authorities bar CSFB from doing new business

The Securities and Exchange Board of India (SEBI) has barred Credit Suisse First Boston (India) Securities and nine other groups from accepting new business for involvement in manipulation of Indian share prices.

This content was published on April 19, 2001 - 15:23

The other nine companies belong to the Nirmal Bang Group and the First Global Finance Group, as well as one sub-broker.

SEBI said it took the action because these intermediaries were involved in price manipulation and their actions had harmed investors.

The financial market watchdog issued the order after concluding a preliminary investigation into allegations of price manipulation and the cause of excessive volatility in Indian share markets.

The Bombay Stock Exchange's benchmark index plunged 42 per cent between March 1 and April 16 as the market was rocked by allegations of rampant price manipulation and insider trading. That in turn led to settlement problems, culminating in the market's worst crisis in a decade.

This is the first time the market watchdog has acted to punish a foreign brokerage, a SEBI official said.

CSFB's brokerage operation in India is small, employing just a total of 30 people.

"We are concerned about the directive. We are contemplating our next course of action," said CSFB's Hong Kong-based head of corporate communications, Tom Grimmer.

All the groups implemented will be allowed to appeal the decision through hearings starting April 30.

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