IIFL Securities turns bearish after SEBI investigates Sanjiv Bhasin; here’s why

Shares of domestic brokerage IIFL Securities turned bearish soon after capital markets regulator Securities and Exchange Board of India (SEBI) initiated a probe into Sanjiv Bhasin’s role in stock market manipulation. Bhasin, who regularly provides stock trading suggestions on various business news channels, was associated with IIFL Securities as a consultant on a contractual basis.

According to a report by news agency PTI, officials have examined Bhasin’s digital devices as part of the investigation and gathered evidence. The initial investigations by SEBI revealed Bhasin would order a private company to buy specific stocks after which he would recommend these stocks for traders to buy on media channels.

SEBI initiates probe on stock manipulation by Sanjiv Bhasin

Bhasin’s digital records over the past few years have provided evidence of his involvement in the above. The probe is also looking into the connection between Bhasin and this entity. In market parlance, the actions being probed by the market regulator are referred to as a ‘pump and dump’ scheme.

Also Read: SEBI investigates Sanjiv Bhasin’s role in stock market manipulation, digital assets examined for evidence

The report quoted IIFL Securities in a statement, “Mr Sanjiv Bhasin was associated with IIFL Securities as a Consultant on contractual basis. His term was to end on June 30, 2024. However, due to health reasons, Mr Bhasin’s contract has been discontinued prematurely with effect from June 17, 2024.”

IIFL Securities added that Bhasin had informed the company about SEBI’s enquiry but the details of the same were not disclosed. Hence, the brokerage refrained from making any comments on the ongoing SEBI investigation.

“Bhasin informed us about SEBi’s enquiry but the details of the same were not disclosed to us. Hence, we will not be able to comment. Please note that he was not a member of the board of directors of IIFL Securities Ltd or any other group company or affiliates,” said IIFL Securities.

Usually, in SEBI investigations, gathering evidence from various sources such as personal gadgets happens in the initial stages, according to the report. After the gathering of evidence, SEBI issues a show-cause notice and then passes an order that may impose penalties or restrictions on the investigated entity, depending on the findings and submissions made by the person or entity under scrutiny.

Also Read: IIFL Securities enhances employee engagement with grant of 3,69,500 stock options under ESOP Scheme 2018

IIFL Securities stock crashes 10% after SEBI probe update

Shares of IIFL Securities crashed more than 10 per cent on Thursday, June 27, after the SEBI probe update. On Thursday, shares of IIFL Securities opened at 226.05 and crashed over 11.35 per cent to hit an intra day low of 202.50, before settling 10.22 per cent lower at 205.10 apiece on the BSE.

On the NSE, the stock declined 9.79 per cent to 205.93 per share. The firm’s market valuation went lower by 713.49 crore to 6,319.72 crore as investors offloaded shares after the SEBI investigation made headlines.

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Published: 27 Jun 2024, 09:57 PM IST

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