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Watchdog Sebi today barred 34 entities from the capital market for fraudulent dealings in the shares of 12 companies including Allcargo Global Logistics, Lotus Eye Care Hospitals and KBS Capital.
The Securities and Exchange Board of India (Sebi) has restrained the "main conspirator" of the alleged manipulative trades, Sunil Mehta, from accessing the securities market for a period of seven years.
"Sunil Mehta envisaged a scheme for manipulation of prices and volumes of the selected scrips, and enlisted the assistance of certain other persons, who directly aided him in placing manipulative orders in the trading account of several persons...," Sebi said.
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Based on the degree and nature of participation in the fraudulent trades, the market regulator has barred 13 entities from dealing in the capital market for a period of five years as they had played an active role in the manipulation and were found to be directly connected with Mehta.
The remaining 20 entities have been restricted from accessing the securities market for a period of three years, as they had only lend their names for opening trading accounts and allowed these accounts to be operated by Mehta and his associates in return for a monthly income.
Meanwhile, Sebi noted that charges against two other persons, Anil Shah and Alpesh Shah, who were also been probed in the matter, "have not been established" as the evidence did not show them having link with Mehta.
The 34 entities are said to be connected with each other and have been found to be involved in synchronised and circular trading that created artificial volumes in the scrips of the 12 firms as well as for influencing their share prices.
These 12 firms are -- Allcargo Global Logistics, Asian Star Company, KSL & Industries, Mavens Biotech, Panoramic Universal, Rasi Electrodes, Sat Industries, Ushdev International, KBS Capital Management, Lotus Eye care Hospitals, MVL Ltd and Anil Products.
Sebi found that Mehta and his associates traded in the shares of the companies and used trading accounts of other linked persons to trade in synchronised, circular manner to manipulate the price and volume of the scrips.
The regulator had probed the irregularities in stock trading of the 12 firms from March 1 to December 15, 2009. It found huge changes in prices of these shares during the period.
Earlier, based on its preliminary probe, Sebi through its interim orders in 2010 and 2011 had barred these entities except one Namita Khicha from the securities market, till further directions.
In its order, Sebi has noted that the period of debarment already undergone by the entities in terms of the earlier orders dated February 2010 and May 2011 "shall be taken into account while computing the said periods of debarment of ordered..."
