Sebi raps BSE for lapses in Rs 6000 crore NDMC share sale

Market regulator Securities and Exchange Board of India (Sebi), on Thursday, rappedthe Bombay Stock Exchange (BSE) for lapses during the Rs 6000 crore share of sale of public sector company National Mining Development Corporation (NMDC), two years ago.

In an order on Thursday, SEBI asked the stock exchange to conduct independent review for remedial steps for lapses that had occured during NMDC’s OFS and advised it to conduct a detailed probe into confirmation of bids by Citibank NA. In December 2012, SEBI sought an explanation from BSE for accepting bids for four crore shares after the cut-off time for trading was over.

The matter relates to the government selling nearly 39.65 crore shares of NMDC through offer for sale on the BSE and NSE in December 2012. As per rules stock exchanges have to reconcile all orders and payments in the half an hour after trading closes at 3:30pm with no no orders being accepted afterwards.SEBI found that the confirmation of bids for NMDC’s 4.55 crore shares, worth Rs 682 crore received from Citibank with available funds was clearly not concluded within the stipulated time of half an hour after post close session.

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According to a CNBC-TV18 report, in its order now, SEBI has found BSE guilty and has asked it to engage one or more independent consultants to review the entire sequence of events in the matter, the processes followed, checks in place, systems employed while accepting the OFS bids by BSE.

The exchange would also need to inform SEBI within further three months as to how the recommendations of the consultants, along with the regulator’s directions have been implemented.

BSE will then fix the responsibility internally, both in terms of processes and personnel, and take appropriate action.