Sebi today barred Sumeet Industries and 14 other entities, including company's chairman, promoters and directors, from capital market for up to 3 years and also directed them to disgorge wrongful gains made by them through stock market manipulation back in 2007.
While Sumeet Industries Ltd (SIL) has been restrained from dealing in the securities market for 2 years, its chairman Shankar Somani, MD Rajkumar Somani have been barred for a period of three years.
Besides, the Securities and Exchange Board of India (Sebi) has prohibited company's three directors, five promoters and four other individuals from the capital market for periods ranging between 2 years and 3 years.
In an order today, the regulator has also directed one of the entities (Purshottam Khandelwal) and SIL promoter group "to disgorge the wrongful gain made by them from their contraventions...With simple interest at 12 per cent per annum from March 12, 2007 till the date of payment".
The unlawful gains amounting to about Rs 5 crore has to be made within 45 days failing which a further restraint of 5 years from capital markets would be imposed, Sebi said.
The latest ruling comes a few months after the market regulator had imposed a consolidated penalty of Rs 17.92 crore on the company and its directors in the same matter.
"In my view, for the serious contraventions as found in the instant case, monetary penalty alone would not be sufficient to safeguard the market integrity," Sebi whole time member Rajeev Kumar Agarwal said.
Sebi found that SIL had made misleading announcements pertaining to preferential issue, joint venture with Vishvas Infrastructure, and scheme of amalgamation, to influence the price of the firm's shares so that the entities could reduce their holdings in SIL at a profitable price.
It was observed that the major counter party to the sales of promoter group entities was Purshottam Khandelwal.
"I am of the view that the SIL, its directors, promoter group entities and Purshottam Khandelwal, acting under a premeditated fraudulent, unfair and manipulative plan, device and artifice, manipulated the price and volume in the scrip to enable the promoter group entities to off-load their shareholding in SIL at profitable prices," Agarwal said.
Sebi had carried out the probe into the suspected price and volume manipulation of SIL shares for the period October 1, 2006 to March 12, 2007.
