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Sebi bans 26 entities from capital markets for 6 months for fraudulent trading

  • During the probe, Sebi found that the entities acted in a manipulative manner for increasing the price of the scrip of PSIT
  • Accordingly, the regulator restrained them from accessing capital markets for a period of six months

NEW DELHI : Sebi has barred 26 entities from the capital markets for six months for indulging in fraudulent and manipulative trading in the scrip of PSIT Infrastructure and Services Ltd.

Puspal Chandra, Dilip Kumar Mandal, Sanjoy Chandra, Mina Chandra, Prakash Mulji Vora, Shilpa Maheshwari, Rajesh Kumar Maheshwari HUF are amongst the 26 entities that have been barred by Sebi.

The regulator had conducted an investigation into the trading and dealings in the scrip of PSIT Infrastructure and Services during May 2012 to July 2015 after it observed abnormal movement in the price of the scrip on BSE.

During the probe, Sebi found that the entities acted in a manipulative manner for increasing the price of the scrip of PSIT.

The regulator observed that the collective trading of the entities led to almost the entire last trading price (LTP) contribution to the scrip of PSIT because of which the price of the scrip rose from 50 to 466.9 during the period in which these entities traded.

The transferors (entities) transferred the shares through off-market transactions in a distributed manner, and within a few weeks of the receipt of shares, the transferees started selling shares in miniscule quantities turn by turn in such a manner so as to raise the LTP of the scrip to the maximum limit possible with every trade over a period of several months, Sebi said in its order on Friday.

Because of the non-genuine and manipulative scheme orchestrated by the entities not only the investors were defrauded and misled but it also impaired the integrity of the securities market, Sebi said.

By doing so, they have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.

Accordingly, the regulator restrained them from accessing capital markets for a period of six months.

Also, if the entities have any open positions in any exchange traded derivative contracts, they can close out and square off such open positions within three months from the date of order or at the expiry of such contracts, whichever is earlier.

Besides, these entities can settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of June 5, 2020, Sebi said.

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