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|April 27, 1998
Big Bull's Net opinion stumps authorities
They suspended him, froze his bank accounts, arrested him, jailed him, kept the hounds of the law and the income tax department after him. And yet the smallest move Harshad Mehta makes on his Web site has the authorities scurrying back to the books to check if what he has done is illegal.
No newspaper television channel or radio station would publish his views. And putting up his own newspaper with all the authorities watching might
But Securities and Exchange Board of India authorities were quick to point out that his recommendations on the web site -- which arguably had an unsettling effect on the share market -- were illegal since a broker, even a suspended one, could not make recommendations under BSE bye-laws. The big bull has denied the charge though his site still has a section called Recommendation of the Month.
His move, though, actually had Bombay Stock Exchange authorities arguing that his ostensibly illegal move should be made legal. It is now considering whether it should get rid of an archaic bye-law that states that no broker can make stock recommendations to investors.
BSE Executive Director R C Mathur says these bye laws were framed when brokers lacked research capabilities. So any recommendation made at that time was a guess, at best an educated one. But things have changed now. And most brokers make suggestions about the client's moves in the research report. In these changed circumstances, the law seem archaic, according to BSE officials.
The BSE board has still arguing over the SEBI letter sent about five months ago, not having replied it yet despite four reminders.
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