Monday, May 1 2006 14:28 Hrs (IST) - World Time -

New Delhi: Market Regulator, SEBI, will probe the steep 490 point volatility in benchmark BSE Sensex on Friday following its interim order on IPO allotment scam.

"Today is only Monday. Yesterday and day-bofore were Saturday and Sunday. We shall be enquiring into it," SEBI Chairman M Damodaran told sources.

Markets have crashed in initial trading a day after SEBI barred 24 operators from functioning in the market for their role in IPO scam.

The benchmark Sensex tumbled by 491 points within minutes of commencement of trading on April 28 but SEBI's partial relief to India Bulls enthused sentiment with Sensex ultimately gaining 17 points.

In a special trading session held between 1030-1330 hrs on Saturday, Sensex closed over 12,000 points. Stock markets are closed today on account of Labour Day.

Damodaran also made it clear that he had not reversed or changed anything in the interim order. SEBI was forced to issue clarification on Friday because of the mis-reporting in the media.

After the market tumbled, SEBI issued clarifiction on Friday that transactions carried out by barred market players on behalf of their clients will not be affected by the ban giving relief to retail investors.

Securities and Exchange Board of India (SEBI), which cracked down on market players including Karvy and India Bulls for their alleged involvement in IPO scam, also asked clients of the banned entities to switch over to other DepositoryParticipants within 15 days.

SEBI in its interim order barred 24 key operators from the stock market and banned 12 depository participants, including HDFC and IDBI, from opening fresh Demat accounts.

After the clarification, BSE Sensex bounced back and this led to speculation that a major meltdown was averted after Finance Minister P Chidambaram intervened in the matter following frantic phone calls from financial bigwigs in Mumbai.

"Media can write anything. I can't be denying each and everything. This is a democratic country. Anybody can say or write anything," he said adding he had not met or talked to Finance Minister for several days.

"I am not denying or confirming anything, I am only responding to questions put to me," he added.

The market regulator also said investigation on the IPO scam will continue and more action was likely if new facts emerge.

"Nothing (investigation) is over. If new facts emerge, we are open to investigation," he said.

Regarding SEBI's decision to keep in abeyance its order to ban stock broking company Indiabulls, Damodaran said it was the first to approach the market regulator and the decision is pending for verification.

The affected brokers have 15 days time to respond, he said, adding SEBI's order was only interim and not final.

He said SEBI will have no hesitation in hearing petitions from other aggrieved parties, if they approach the market regulator.