19 entities banned for manipulation

The Securities and Exchange Board of India (Sebi) has banned 19 entities, including three individuals, from accessing the securities market for allegedly manipulating and artificially depressing share prices of four companies on July 26.

On July 26, share prices of four companies — Pipavav Defence, Parsvanth Developers, Tulip Telecom and Glodyne Technologies — declined more than 20 per cent each despite no corporate announcements or disclosure of price sensitive information.

A preliminary investigation by Sebi revealed a common set of entities were instrumental in pushing the share prices of these companies downward by placing orders below the prevailing market price.

In a 22-page interim order, the regulator observed a seller would rationally seek a higher price to sell his shares. However, in this case, the clients were placing sale orders at prices lower than last traded price, thereby bringing down the price of the scrips.

“If they are allowed to continue to operate in the market, the same is fraught with danger of immense mischief and incalculable damage to the securities market besides undermining the confidence of the investors in the fairness and integrity of the market. It is, therefore, my considered opinion that immediate and urgent intervention to prevent the continuance of such operations is warranted,” said Rajeev Agarwal, whole-time member at Sebi in an order on Friday.