Home/ News / India/  Sebi bars 24 entities from securities mkt for 3 yrs in Sulabh Engineers matter

Market regulator Sebi on Friday barred 24 entities from participating in securities markets for three years for indulging in the manipulation of the stock price of Sulabh Engineers and Services Ltd.

Sebi said that the order will come into force with immediate effect.

The regulator had conducted an investigation in Sulabh Engineers' stock for any violations of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms. 

It ordered an investigation of 150 entities in the company's stock during the period December 2011 to January 2015.

Sebi in its September 2020 order noted that102 entities had violated PFUTP rules. 

It restrained them from accessing the securities market. It also disposed of the show-cause notice against 47 other entities.

The regulator noted Sulabh Engineers had come out with two preferential allotments during March 2011 and March 2012. After this, the price of the stock was artificially manipulated by promoter directors and its connected 24 entities.

The acts of preferential allotments, price manipulation and subsequently selling substantial shares, constitute a scheme, in which company, promoter directors and connected noticees, including the preferential allottees are implicated.

"The various stages of the scheme have in effect resulted in inducing the investors to trade in its scrip, for instance, announcement of two preferential allotments by the company in successive years at a premium created a positive sentiment for the company, connected noticees by trading in a specific manner artificially increased the price and lured the investors," Sebi said.

Through such acts, these 24 entities violated the provision of PFUTP norms.

Accordingly, Sebi has barred the entities "from accessing the securities market for a period of three years ... and are also prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for the same period".

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Updated: 27 Jan 2023, 09:02 PM IST
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