Sebi imposes Rs 1.62 crore fine on 9 entities for fraudulent trading


Capital markets regulator Sebi on Tuesday fined nine entities Rs 1.62 crore for manipulating shares of Sterling Green Woods Ltd.

In its order, the regulator imposed a fine of Rs 18 lakh on each of the entities – Radhe Krishna Broking, Harshad Panchal, Hemang Shah, Umesh Patel, Abhishek Soni, Sonal Patel, Dhaval Soni, Anurag Agarwal and Paksh Developers Pvt Ltd.

The Securities and Exchange Board of India (Sebi) had been investigating an alleged irregularity in the trading of certificates of Sterling Green Woods Ltd (SGWL) for the period April-July 2009.

In its order, Sebi noted that SAT, by order dated March 2, 2022, granted the appeals filed by the entities against sebi’s order.

The court had returned the case to Sebi for a new order on the merits after giving the appellants the opportunity for a personal hearing.

Passing a 107-page order, the regulator discovered that there were nine entities as well as a few others, collectively called Hemang Shah Group, were connected to each other and also trading SGWL’s certificate, Sebi said in an order. .

In addition, Paksh Developers and its director Anurag Agarwal had provided the money (through Paksh’s bank account) as well as the shares of the company (by selling the shares through Paksh) to Hemang Shah Group entities.

Subsequently, they rigged the price by placing buy and sell orders at a higher price and hoarded the shares while creating artificial volume in the certificate, the regulator noted.

In addition, the regulator observed that when the scrip price peaked in July 2009, the entities sold their stake in the same month.

The price was boosted by transactions from Hemang Shah Group entities, Sebi said.

The nine entities made a profit of Rs 54 lakh by creating artificial volumes, rigging prices and selling shares in July 2009.

In doing so, the entities violated the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices).

Meanwhile, in another order, the market regulator fined four people Rs 37 lakh for engaging in misuse of IPO proceeds and other disclosure failures in Resurgere Mines and Minerals India Ltd (RMMIL).

The order came after Sebi conducted an investigation into RMMIL’s IPO for the period September 1-8, 2009.

RMMIL had exited with its August 11-13, 2008 IPO and issued an ICD of PR Vyappar at the same time.

RMMIL was found to have misappropriated and not used the IPO proceeds for the purpose for which they were raised.

In addition, they made erroneous and misleading disclosures and non-disclosures with respect to ICDs (intercompany deposits) in the offering document and defrauded investors in general.

Besides the company, the directors and its compliance officer also recklessly failed to do their part, resulting in the diversion of IPO proceeds, and failed to exercise due diligence to prevent the breach .

In doing so, they violated the PFUTP standards.

In another order, the regulator fined Pantomath Stock Brokers Pvt Ltd (now known as Pentagon Stock Brokers Pvt Ltd) Rs 20 lakh for engaging in misuse of client securities.

In a separate order, the regulator fined two people Rs 10 lakh for non-disclosure breaches in the Netlink Solutions (India) Ltd case.

In another order, Sebi fined Tamarind Capital Pte Ltd Rs 10 lakh for crossing the voting rights limit and failing to make a public open offer announcement in the Indiabulls Ventures Ltd case ( now known as Dhani Services Ltd).

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


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