Sebi eases restrictions on 22 entities in Dhyana Finstock case

Sebi today relaxed restrictions on Dhyana Finstock and 21 other entities against whom it had taken action in a case of alleged misuse of stock market platform for tax evasion and suspected money-laundering activities.

The entities, which were barred from the securities market in a case, have now been given certain relaxations, including permission to deal in government securities and invest in ETF (exchange-traded funds).

Besides, they can enter into delivery-based transactions in cash segment in NSE Nifty 500 index as well as S&P BSE 500 shares and subscribe to mutual funds.

Among others, these entities can tender shares lying in their demat account in any open offer/delisting under the relevant Sebi regulations.
 

Sebi had restrained Dhyana Finstock and 75 other entities from the capital markets markets in June 2016 from the market for using the securities system to artificially bump up volume and price of the scrip to provide illegitimate gains to preferential allottees. Out of them, 22 entities including Dhyana Finstock have been given the relaxations.

The end purpose, according to the Securities and Exchange Board of India, was to claim long-term capital gains (LTCG) benefits.

The regulator had rejected the prayers of the 22 entities "for setting aside the interim orders or for complete removal of restraints imposed by it". However, it has given certain relaxations to these entities.

As per the latest order, the entities for whom relaxations have been extended can sell the securities lying in their demat accounts as on the date of interim orders. This will exclude shares of the companies which are suspended from trading by stock exchanges concerned.

Besides, sale proceeds lying in the escrow account can be used for certain purposes.

Sebi said, "up to 25 per cent of the value of the portfolio as on the date of the interim order or the amount in excess of the profit made/loss incurred or value of shares purchased to give exit, whichever is higher, may be utilised for business purposes and/or for meeting any other exigencies or addressing liquidity problems etc".