Sho PISIOUL @IN NH _ Sa RRR OREO He SIRI eee UNDER SCANNER Angel Broking sends note to Sebi By AVEEK DaTTA & ANIRUDH LasKAR MUMBAI umbai-based Angel Broking Ltd said a senior analyst may have passed on a rumour about the Reliance Group companies in his per- sonal capacity, without its knowledge or authorization. Angel Broking disclosed this to stock market regulator Se- curities and Exchange Board of India (Sebi) in a written reply to queries raised by the latter. A copy of the letter has been reviewed by Mint. Following a complaint by Reliance Group over an al- leged bear hammering of its stocks, Sebi has been probing the involvement of some bro- kerage houses. On 9 February, Reliance Group companies fell sharply. The biggest loser was Reliance Infrastructure Ltd, which lost 18.79% on the Bombay Stock Exchange (BSE). The bourse’s benchmark equity index, the Sensex, lost 1.03% on the same day. In its reply to Sebi on 17 February, Angel Broking wrote that one of its senior analysts, Bhavesh Chauhan, had admit- ted receiving a “rumour” from one Umesh Patel of Wallfort Fi- nancial Services Ltd on 9 Feb- ruary and forwarded the same to a group of institutional cli- ents who were his “personal contacts carried from his pre- vious employment” at SMC Global Securities Ltd. “It may be noted that in sending out the said objection- able email, Mr Bhavesh acted in his own capacity without any authorization or complici- ty directly or indirectly from our side,” Angel Broking said. Chauhan was not authorized to communicate with clients, it said. The brokerage had initiated disciplinary action against Chauhan for breaching its code of conduct, it said. Angel Broking says one of its senior analysts had admitted receiving a “rumour” SAE, Chauhan could not be reached over the phone de- spite several attempts. Sebi may call upon Angel Broking to prove that its man- agement was not aware of Chauhan’s actions, said a per- son with direct knowledge of the investigation. “The investigation is still in its early stages and any link is yet to be established. It is also to be ascertained whether the information sent out could have had any material impact on the share prices of the com- panies in question,” the per- son said. He did not want to be named as the matter is sensi- tive. In response to an email from Mint, an Angel Broking spokesperson wrote back stat- ing that Angel was not in- volved in generating such a call. “In fact, all Angel Broking customers had long positions in all Adag (Anil Dhirubhai Ambani Group) stocks right from the morning of 9 Febru- ary,” the spokesperson said. The onus is on registered in- | termediary in the capital mar- kets to put safeguards in place to prevent such abuse, said Mumbai-based chartered ac- countant Jayant Thakur. “A number of things need to be ascertained in this case. First, whether the act commit- ted by the individual was in the course of his duty and whether his position and accompany- ing authority were known to the outside world,” Thakur said. aveek.d@livemint.com