Sebi lifts trading ban on Ruchi Global, 4 other firms in castor seeds case

Markets regulator the Securities and Exchange Board of India has lifted its trading ban on five entities, including Ruchi Global and Ruchi Soya Industries, in a case related to alleged manipulation in castor seeds trading.

National Steel & Agro Industries, Secunderabad Oils,  and UKS Oils are the other entities on whom the ban has been lifted. Through two interim orders passed in March 2016 and May 2016, Sebi had barred the five entities, among others, from the securities markets for alleged fraudulent and manipulative trading in castor seeds on leading commodity bourse NCDEX.

Later in March 2017, the directions issued against them were confirmed. In an order passed on Wednesday, Sebi revoked the direction issued against the five entities with immediate effect.

 

In the show-cause notice it was alleged that by taking open interest (OI) positions in excess of the prescribed limits, the five entities were able to corner the market at the expense of other clients, and, thus, had traded in a fraudulent and deceitful manner and their excess OI positions created a false or misleading appearance in the market.

The notice further said that Ruchi Global and Ruchi Soya Industries and National Steel & Agro Industries belonged to one distinct group, while Secun­d­e­r­abad Oils and UKS Oils belonged to another distinct group.

“In the absence of any material to show that these two distinct groups were connected to each oth­er and traded in the castor seeds contracts in a concerted ma­n­ner to manipulate the market, it is not correct to allege that the five no­ticees together corne­r­ed the derivative market in castor seeds contract...in violation of PFUTP Regulations, 2003 and at the ex­p­e­nse of other clients,” the Sebi said.

It said the notice does not prov­­ide any details as to whether these two distinct groups had coor­d­inated between themselves to ca­r­ry out such cornering of the mark­et in­volving violation of the PFUTP (Pr­ohibition of Fraudulent and Unfair Trade Practices) Regulations.