Sebi has slapped a total penalty of Rs 47 lakh on Vinod Shares Ltd and an individual Vishal Vijay Shah for fraudulent trading in shares of Maharashtra Polybutenes.
Penalties of Rs 32 lakh and Rs 15 lakh have been imposed on Vinod Shares and Shah, respectively, according to separate orders issued by Sebi.
The capital market regulator had investigated the alleged irregularities in the shares of Maharashtra Polybutenes Ltd (MPL) between February 2009 and July 2009. Then it was found that the two entities indulged in fraudulent trading activities that resulted in artificial volumes.
MPL had incurred losses till financial year 2006-07 fiscal and made just Rs 2.91 crore profit in 2008-09 financial year. The company's shares were infrequently traded before the relevant period.
During the February-July 2009 period, there was sudden spurt in the volumes traded and price of the scrip without any significant change in the economic fundamentals of the company, according to Sebi.
"The self trades executed by noticee (Vinod Shares) on numerous instances has created artificial volume and prices in the scrip resulting in false and misleading appearance of trading in the scrip and also manipulated the price of the scrip...," Sebi said in its order against Vinod Shares.
