Our smart regulator SEBI introduced Periodic Call Auction to save retail investors from PRICE MANIPULATION AND LOW LIQUIDITY !!!!.But some over smart promoters find ways to escape from this system ,that itself without selling even 100 shares to general public in one quarter. Unbelievable ? , no, it is possible.Read it below :
As per the circular issued by SEBI ,a stock will fall into PCA if it is satisfying all the below three conditions.
See the below picture to see the daily trading volume of WESTLIFE DEVELOPMENT LTD :
It is clear from the data that ,out of 56 trading days during this period ,every day except on 22/03/2013
just one or two shares traded.But on 22 nd,total traded volume was as high as 625001. The most interesting part is that even you entered a buy order on that day at the very first second of trading hour on upper circuit ,you can't become a share holder of this company .The entire traded quantity on that day executed through the block deal window between few promoters itself . ( see the data below)
Block deal is a facility provided by exchanges In order to facilitate execution of large trades.A separate trading window is provided. A trade, with a minimum quantity of 5,00,000 shares or minimum value of Rs.5 crore executed through a single transaction on this separate window of the stock exchange will constitute a BLOCK Deal
It is clear that normally Block Deal window is out of reach of common investors.
WITH THIS SINGLE BLOCK DEAL WITHIN FAMILY MEMBERS ,COMPANY SUCCESSFULLY SATISFIED THE CRITERIA ( MORE THAN 10000 SHARS PER DAY) TO COME OUT OF PCA WITHOUT GIVING 100 SHARES TO GENERAL PUBLIC.
ON THE OTHER SIDE ,THERE IS LOT OF GOOD COMPANIES WITH DAILY VOLUME OF 2000 OR 5000 ARE CAUGHT IN PCA .
THIS SAME COMPANY DONE THE SAME GAME IN THIS ONGOING QUARTER WITH A BLOCK DEAL OF 630000 SHARES ON 19/06/2013 ,AND IT WILL ESCAPE THIS TIME TOO IF SEBI IS NOT CONSIDERING IT AS A SEPERATE CASE.
MESSAGE FROM SEBI TO PROMOTERS :- IF YOU WANT TO EXIT FROM PCA , DO SOME FRAUD PRACTICES LIKE THIS ,IF YOU ARE GENUINE WE WILL PUNISH YOU .