Market regulator Sebi today imposed a fine of Rs 1 crore on Teakwood Management Services for allegedly indulging in fradulent trade in the shares of Edserv Softsystems.
The Securities and Exchange Board of India (Sebi), in its order, slapped "a penalty of Rs 1 crore upon the noticee (Teakwood Management Services) for violations of ...PFUTP (Prohibition of Fradulent Trading Parctices) Regulations."
According to the regulator, Teakwood Management Services (formerly known as Nirman Management Services)had executed buy orders at higher price than the prevailing market price despite the availability of sufficient sell orders at the lower price in the market and thereby manipulated the share price of Edserv Softsystems.
Besides, Sebi said that the company executed self/ fictitious trades which resulted in no change in beneficial ownership of shares.
"The noticee had created artificial volume in the shares of Edserv Softsystems by placing purchase and sale orders of same number of shares at same price within a gap of negligible time at the lower circuit limit and thereby created misleading appearance of trading," Sebi said.
The market watchdog, which conducted a probe in the scrip of Edserv Softsystems, found that Teakwood Management Services had earned a "positive square off difference of Rs 24.01 lakh due to indulgence in such trading."
"...Such fraudulent and manipulative act/practice/ mechanism as adopted by the noticee in the present case (i.E. price manipulation, no change in beneficial ownership of shares/self trades and creating artificial volume) is serious in nature which has the cascading adverse effect towards the securities market and investors," Sebi noted.
