Markets regulator Sebi has imposed a total penalty of Rs 10 lakh on six entities including two promoters of Popular Estate Management in a matter related to manipulative trading in the shares of the firm.
Of the five entities, the two promoters are Priyesh Ramanlal Patel and Bhumi Prathmesh Patel. The other four are Asha Rajendrabhai Patel, Krinesh Farms, Vikram Farms and Saranga Farms.
As per six separate orders dated April 18, Sebi has imposed a penalty of Rs 1 lakh each on the six entities for violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations and Rs 2 lakh each on the promoters for disclosure lapses.
The Securities and Exchange Board of India (Sebi) had conducted an investigation in the matter of trading activities of certain entities in the scrip of Popular Estate Management, which is listed on BSE, for the period from January 1 to November 16, 2012.
Further, on the basis of trading pattern, off-market transfers and common KYC details, three groups were made by Sebi.
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It was observed by Sebi that Priyesh Ramanlal Patel along with eight other entities in Group 1 had traded in the shares of the firm during the investigation period and contributed to last traded price (LTP), new low price (NLP) and first trades, as a result of which, artificial volume in the shares was created.
Group 1 included Bhumi Prathmesh Patel, Asha Rajendrabhai Patel, Krinesh Farms, Vikram Farms and Saranga Farms.
"... the noticee along with other eight entities executed trades among themselves, which contributed to negative LTP, NLP and also executed first trade during the investigation period," Sebi said in the order regarding Priyesh.
The regulator noted that by executing these trades, Priyesh influenced the price of the scrip of Popular Estate Management during the investigation period.
Such acts of "manipulative trading" by Priyesh helped in creating artificial volume and thereby led to false appearance of trading in scrip of the firm and also caused fluctuations in the price of scrip of the company, Sebi said.
"Therefore, I conclude that the noticee (Priyesh) has violated... the PFUTP Regulations, 2003," the regulator said.
Besides, Priyesh Ramanlal Patel and Bhumi Prathmesh Patel failed to make disclosure to the company and the BSE with regard to their shareholding within the required time as prescribed under the PIT (Prohibition of Insider Trading) Regulations.
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