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In its biggest crackdown on suspected tax evasion and laundering of black money via stock-trading platforms, the Securities and Exchange Board of India on Friday barred 260, including individuals and companies, from the securities markets.
While it will further probe the cases, it has decided to refer the matter to the income-tax department, the enforcement directorate, and the financial intelligence unit, among others.
Through two separate interim orders, Sebi said that these 260 entities would be restrained from accessing the securities market and from buying, selling or dealing in securities, either directly or indirectly, with immediate effect till further directions.
It has also asked stock exchanges and the depositories to ensure that all its directions are strictly enforced.
While 152 entities have been barred in a case relating to an entity named First Financial Services, another 108 have faced action in a case related to Radford Global.
The action comes at a time when the central government has sharpened its focus on unearthing black money stashed abroad and within the country, while Sebi also has tightened its surveillance of shell companies created for tax evasion or money laundering or both.
In the first case, the suspected dealings took place on the stock market for two years till March 31, 2014. The second case relates to a period of little more than a year starting January 2013.
Sebi said the way of the entities typically involved stock-market dealings aimed at evading long-term capital gains tax and showing the source of income as legitimate from stock markets.
"... The schemes, plan, device and artifice employed in this case, apart from being a possible case of money laundering or tax evasion which could be seen by the concerned law enforcement agencies separately, is prima facie also a fraud in the securities market in as much as it involves manipulative transactions in securities and misuse of the securities market," the regulator said.
