Markets regulator Sebi today confirmed its interim order banning 11 entities in a case related to tax evasion and money laundering through stock exchange platform.
The Securities and Exchange Board of India (Sebi), via an interim order dated June 1, this year had prohibited 76 entities, including the aforesaid 11, from the securities market for suspected money laundering and tax evasion activities.
Sebi, prima facie, had found that a number of entities connected to Dhyana Finstock employed a device wherein the company in nexus with the preferential allottees made a facade of preferential allotment.
After the expiry of the lock-in period, the Dhyana Group purchased shares from preferential allottees at artificially increased prices. In the whole process, entities of the Dhyana Group provided a hugely profitable exit to the preferential allottees in order to book illegitimate gains with no payment of taxes as LTCG (Long Term Capital Gains) is tax exempt.
"Apart from misusing stock exchange mechanism for bogus LTCG, investors were also lured to buy shares of Dhyana at an unjustified price with the bait of stupendous profits and the shares were dumped on these investors," as per the interim order.
In an order passed today, Sebi Whole Time Member Rajeev Agarwal said he did not find any reason to revoke or modify the directions of the interim order passed in June this year against the notices (11)
Accordingly, the regulator has confirmed interim order passed against these entities.
"The interim order dated June 1, 2016 shall remain in force till further directions," Sebi noted.
It further said detailed investigation in the matter is still in progress.
Among the 11 entities are -- Pinakin Dahyabhai Makwana, Suresh Chinde Gowda, Baldevbhai Shankerlal Patel, Jayshreeben Shah, Rinkeshkumar Panchal, Parin Infrastructure and Kiritbhai Shah.
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