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Market regulator Sebi has confirmed its interim order banning 21 entities in a case related to tax evasion and illegal gains through misuse of stock exchange mechanism.
A detailed investigation is on against others.
Sebi in an interim order dated June 1 had barred Dhyana Finstock and 75 other entities, including the aforesaid 21, from the market for using the securities system to artificially bump up volume and price of the scrip to provide illegitimate gains to preferential allottees.
The end purpose, according to the Securities and Exchange Board of India, is to claim long-term capital gains (LTCG) benefits.
As per the interim order, the probe by Sebi and BSE began after the stock exchange received complaints from several investors in July last year that they have entered into buy trades in Dhyana on July 27, 2015 based on the stock tips received through SMS.
According to the earlier order, a website registered in Pakistan -- 'bsebull.In' -- was used to lure investors through fraudulent SMSes. A number of buy orders were placed based on messages appearing on bsebull.In, Sebi had noted.
The latest order comes after the 21 entities did not submit their reply and failed to avail of personal hearing after the interim order was passed in June.
"I am of the view that the noticees (21) are deliberately keeping away from these proceedings and are not willing to co-operate," Sebi Whole-time Member Rajeev Kumar Aggarwal said.
As per the interim order, the company, its directors, promoters, preferential allottees and the Dhyana group employed a device wherein "the company in nexus with the preferential allottees made a facade of preferential allotment".
After the expiry of the lock-in period, the Dhyana group purchased shares from preferential allottees at artificially increased prices. In the whole process, entities of the Dhyana Group provided a hugely profitable exit to the preferential allottees.
The regulator noted that the beneficiaries made a collective profit of Rs 107.43 crore on a collective investment of Rs 5.22 crore, a whopping return of approximately 2,060 per cent on their investment in 20 months.
In its latest order, Aggarwal said he did not find "any reason to revoke or modify the directions of the interim order dated June 1, 2016, in the matter of Dhyana Finstock Ltd against the noticees (21 entities)".
Accordingly, Sebi has confirmed the interim order passed against the 21 entities.
Sebi had prima facie found that the entities acted in concert for implementation of the dubious plan, device and artifice that has led to the misuse of stock exchange mechanism.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)