Indian authorities are prosecuting thirteen companies, accusing them of manipulating share prices.

The charges relate to March 2001, when the country's main stock index in Bombay, also known as Mumbai, fell 20%.

It has been alleged that these firms were involved in a so-called 'bear cartel' - where firms deliberately club together to drive down the market in order to profit at a later date.

The scandal led to an investigation into practices at hundreds of firms and an overhaul of the country's stock market regulator - the Securities and Exchange Board of India.

Changes made

The Press Trust of India has named the firms as Cyberspace, First Global Stock broking, FirstGlobal Finance, DSQ Software, Adani Exports, Vruddhi Con Finvest (part of First Global), Pentamedia Graphics, Nirmal Bank Securities, Goldfish Computers, Nakshatra Software, Dolat Capital and Shailesh Shah Securities.

Among the companies investigated were foreign institutional brokerage firms including Morgan Stanley and Credit Suisse First Boston.

Since the scandal in March 2001, a new regulator has been appointed.

The regulator has been active in reforming the structure of Indian stock markets.

Measures have been taken to make companies more transparent, more checks and balances have been put in place in equity trading and dealing, and a new takeover code has been introduced.

The 13 companies facing prosecution are accused of serious offences which carry a maximum penalty of five years in prison and a hefty fine.