Sebi bans Tayal group firm from securities market

The Securities and Exchange Board of India (Sebi) on Friday barred Jaybharat Textiles and Real Estate, a company which is part of the Tayal group, from accessing the securities market and also from any buying, dealing in or selling of shares. It also prohibited 30 entities related to the company from buying, selling and dealing in shares.

The order said the company and entities under control of the promoters had violated several provisions of the Sast (Substantial acquisition of shares) regulations and listing agreement.

Earlier this week, Sebi had banned various Tayal group firms and its main promoter, P K Tayal, for wrong disclosure of shareholding in the Bank of Rajasthan.

Sebi's preliminary investigation found that related entities had dealt in scrips of Jaybharat Textiles and KSL & Industries in substantial quantities, contributing towards a price surge. Several entities had the same address as that of registered companies of the Tayal group.

From the investigation, Sebi deduced that promoters of the company, along with their connected entities, had on a common understanding acquired and held shares in Jaybharat which were far in excess of what had been declared by them publicly. The promoters disguised the extent of the shareholding in a devious manner, through the artifice of holding shares in ‘benami’ names, in most cases their employees or workers.

"The extent of their shareholding violated the requirement of minimum threshold mandated for public shareholding to be eligible to be a company listed on the stock exchanges," said Sebi’s order.

There was, Sebi observed, total misinformation on the basic levels of shareholding of the promoters. Only a miniscule volume of shares of Jaybharat Textiles were available for trade on the exchanges and did not guarantee any protection to investors. And, completely impeded price discovery and transparency in the market.