Counters allegedly favoured by Samir Arora, former head of emerging Asian markets at Alliance Capital, closed lower on Monday on concerns that the Securities and Exchange Board of India might stumble upon more skeletons.

A dealer with a local brokerage said the stocks tumbled following Sebi's indication that "Samir Arora had a close rapport with these firms for extracting crucial, unpublished, price-sensitive information."

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The Digital GlobalSoft scrip lost 2.57 per cent and dropped to Rs 465.45, but off the day's low of Rs 439.80.

On Saturday Sebi said its investigations had shown that Arora had disposed of the fund's entire holding of 1.46 million Digital shares immediately after the independent valuer submitted its report but prior to the announcement of the ratio for the de-merger of a division of Hewlett-Packard India and Digital Equipment.

Arora's other favourite counters tumbled as well. Hinduja TMT fell 4.03 per cent to Rs 203.80 after having touched a low of Rs 195.50.

Balaji Telefilms lost 3.98 per cent at Rs 72.35 and Mastek tumbled 1.62 per cent at Rs 206 as key operators offloaded their positions.

However, United Phosphorous rose 2 per cent to Rs 241.55, and media major Zee Telefilm gained 0.09 per cent at Rs 115.30.

Alliance Capital's senior vice-president and head of retail sales for Asia, Ajai Kaul, told Business Standard: "According to the information available with us, we do not believe there has been any insider trading. However, Alliance is studying the matter."

In a communication to the Bombay Stock Exchange, Digital GlobalSoft said it "understands that various and multiple aspects have been considered and evaluated by Sebi to arrive at and issue its above-mentioned order. Digital has implemented and adopted comprehensive insider-trading policy guidelines and processes, which are in compliance with Sebi regulations and support best practices of corporate governance.

"The company and its officials concerned have been compliant with and conform to its policy guidelines and processes, Sebi regulations, trading restraints and the applicable disclosure norms.

"Digital, therefore, maintains its view that it does not believe any irregular flow of information could have emanated from within the company in this regard."

In a similar statement to the BSE, Mastek said it "strongly believes that the senior management has no legitimacy to run companies on behalf of shareholders if it is involved in practices like selectively sharing crucial, unpublished, price-sensitive information.