Markets regulator Sebi Monday slapped a fine of Rs 3.40 crore on Exelon Infrastructure and 27 other entities, including promoters and directors, for indulging in fraudulent trading and violating insider trading norms.
Of the total penalty, the firm has been fined Rs 1.19 crore and the 27 entities have been penalised in the range of Rs 1 lakh to Rs 25 lakh.
The order follows the regulator's investigation from December 2010 to January 2012 observing abnormal price movement in the scrip created by positive corporate announcement by the firm.
Sebi found that the company's announcement to raise Rs 200 crore through global depository receipts (GDR), public issue and preferential issue as well as its plans to enter into power sector led to increase in the share price. These announcements were made without any intention of implementing them, it added.
Besides, the BSE was not informed about the non-implementation of these corporate announcements.
In case of 27 entities, the regulator said the group entities connected to promoters and directors of the firm manipulated the price of the scrip by contributing Rs 71.05 to NHP (new high price) out of total market NHP of Rs 93.35.
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Moreover, the directors and promoters failed to disclose the change in their shareholding to the exchange within stipulated time, hence violated PIT (Prohibition of Insider Trading) norms, Sebi observed.
During the period when the company and its directors had made misleading advertisements of positive nature, the group/connected entities traded in the scrip of Exelon and manipulated the price of the scrip and created artificial volume, the regulator noted.
By indulging in such activities, the entities contravened PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, Sebi said.
"People who indulge in manipulative, fraudulent and deceptive transaction, or abet the carrying out of such transaction which are fraudulent and deceptive should be suitably penalised for such acts of omissions and commissions," the regulator said.
In a separate order, Sebi imposed a penalty of Rs 65 lakh on Life Care Real Developers and seven former and present directors. The amount has to be paid "jointly and severally" for failing to comply with regulator's earlier directions of refunding the money to the investors.
In 2015, Sebi had directed the entities to refund Rs 4.3 crore collected through RPS (redeemable preference shares) after it found that the issuance of shares was a public issue and firm had not fulfilled the requisite requirements like prior registration and listing on the exchanges, among others.