Kochi, Thursday 30 Oct 2008: The Kerala High Court yesterday issued notices to the Union government, RBI and SEBI on a petition seeking quashing of the RBI circular, imposing an embargo on Foreign Institutional Investors to short sell, lend and borrow equity shares of listed Indian companies.
According to the petitioner Trueway Financial Services Pvt Ltd, Thrissur, an authorised share dealer, the issuance of the circular, dated December 31, 2007, led to unprecedented collapse in the Indian capital market. It was against SEBI guidelines and policies framed by the central government.

The present downfall in the Indian capital market is not due to global economic crisis, but due to the ‘unholy’ haste of the central government and RBI to issue the circular to protect foreign investments in the country by sacrificing the interests of small and common investors, the petitioner said.

Justice V Giri, before whom the petition came up, admitted the same and issued notices.