Sebi levies Rs 1.76 cr fine on 26 people for fraudulent trading activities

Capital markets regulator Sebi has slapped fines totalling Rs 1.76 crore on 26 individuals for indulging in fraudulent trading activities in the shares of Gala Global Products Ltd (GGPL).

The regulator has imposed penalties ranging from Rs 5 lakh to Rs 10 lakh.

Securities and Exchange Board of India (Sebi) had conducted an investigation into the scrip of GGPL during the December 2017- April 2018 period.

According to the watchdog, the individuals were connected to each other and had indulged in reversing their trades among themselves for the purpose of creating artificial volume.

It also created a false and misleading appearance of trading in the company's shares without the intention of change of actual beneficial ownership.

 

Further, it was revealed that the individuals (noticees) while acting in tandem acted in a manipulative manner to inflate the scrip price.

The regulator also noted that some of the individuals by way of trading among themselves had contributed to the new high price of the scrip.

"...the trades of the noticees created a misleading appearance of trading and contributed to increase in the scrip price of GGPL in a manipulative manner," Sebi said in an order passed on Tuesday.

They violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations.

"By executing manipulative trades, as has been executed by the noticees in the matter of GGPL, the price discovery system itself is affected. It has also had an adverse impact on the fairness, integrity and transparency of the stock market," Sebi said while imposing the penalties.

In a separate order, Sebi has slapped a monetary fine of Rs 5 lakh each on Woodlight Infrabuild Pvt Ltd (now known as Suvarchas Buildmart Ltd) and Teagan Traders India Pvt Ltd and Prabha Bhandari for flouting the PFUTP norms in the matter of Siddarth Businesses Ltd (now known as Shivamshree Businesses Limited).