Sebi's Manic Monday probe to remain only a ‘probe'

NEW DELHI: The market regulator Sebi''s probe into "Black Monday", the biggest meltdown in the history of Indian stock markets is headed nowhere, although there are conspiracy theories galore, many of them floated by influential politicians. Sebi is yet to unearth any "right-wing conspiracy", "bear cartel" or "big market manipulator" behind the May 18 intra-day crash of Sensex by a record 880 points, ending with a 560-point collapse.
Sources said Sebi knows its probe would perhaps not be able to prove any of the conspiracy theories, yet it can''t rule them out for fear of political controversy.Sebi chief G N Bajpai, who called on the finance minister P Chidambaram here on Tuesday, had a 30-minute-long meeting to brief him about the markets. "We are yet to analyse the data. It will be too premature to say anything now," he said afterwards. He declined to give a time frame within which Sebi would complete the probe and submit a report.
Sebi is nowhere near getting the culprits a week after the crash and it would perhaps never get them, going by the fate of similar Sebi investigations into the previous 3 market scams since 2001. Sebi is just not equipped to handle such investigations — it has so far not been able to fix responsibility for the wild volatility in bank stocks this time around a year ago; neither has its probe into the so called "bear hammering of PSU stocks" during the 6 big IPOs in March reached any conclusions.
Sebi''s surveillance system can at best analyse the trade data from the markets to narrow down the brokers who might have been unusually active in a volatile market. It could do very little to get the clients and reach the "real manipulators". With Indian markets getting globalised, the operators, Sebi looking for, could actually be based overseas. Sebi has no access to them.
The Sebi chief is understood to have assured FM that the "integrity of the market" is intact and the silver-lining in the episode was that the Sebi''s risk management system worked perfectly.