Sebi levies Rs 4 million penalty on 13 entities in fraudulent trading case

Capital markets regulator Sebi on Monday imposed a penalty totalling Rs 4 million on 13 entities for indulging in fraudulent trading in the shares of Rajlaxmi Industries Ltd.

The order comes after Sebi conducted a probe in the matter from January 2013 to September 2014 to ascertain the irregularities in the funding of preferential allotment by Rajlaxmi Industries.

In its probe, Sebi found that Rajlaxmi Industries and its management -- Aditya Jaipuria and Rahul Jagnani -- have played an integrated role in creating a scheme and device, wherein, the company has routed the fund received from other preferential allottees through conduits -- Dhanprayog Vintrade and Shivaangan Vintrade and funded eight allottees -- Deepak Agarwal, Deepak Kumar HUF, Dilipp Agarwal, Dilipp Agarwal HUF, Priti Agarwal, Sabita Agarwal, Sita Ram Agarwal and Vibha Agarwal for subscribing to the preferential issue of the company, the order mentioned.

Through such acts, they perpetrated such fraud on investors by giving an impression of capital infusion through preferential allotment and therefore, limited the genuine capital infusion and thus violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, it added.

Besides, in three separate orders, Sebi imposed a penalty of Rs 500,000 each on Karan Singh Dhillon, Madhuri Holani and Liladhar Premnarayan Navalkishore for violating PFUTP norms.

The case pertains to alleged irregularity in the stock options segment of BSE, leading to the creation of artificial trade volumes.

By indulging in such trades in stock options, they violated the provisions of PFUTP regulations.