Sebi slaps Rs 15 lakh fine on 3 entities for fraudulent trading activities

Markets regulator Sebi on Thursday slapped a total fine of Rs 15 lakh on three entities for indulging in manipulative and fraudulent trading activities in the scrip of Siddarth Businesses Ltd.

The regulator levied a fine of Rs 5 lakh each on Woodlight Infrabuild Pvt Ltd, now known as Suvarchas Buildmart Private Ltd, Teagan Traders India Pvt Ltd and Prabha Bhandari.

The entities are collectively referred to as noticees.

The noticees were found to have violated Prohibition of Fraudulent and Unfair Trade Practices norms, Sebi said in an order.

The regulator had conducted an investigation in the shares of Siddarth Businesses, now known as Shivamshree Businesses Ltd, during the period from July 4, 2014 to October 30, 2016.

It was found that the shares of Siddarth Businesses were re-listed on the BSE with effect from July 4, 2014 during which 12 sell orders and 36 buy orders were placed.

Further, it was revealed that the only seller of the scrip on July 4, 2014 was Prabha Bhandari and the major counterparties to her trades were Woodlight and Teagan.

Sebi also noted that the noticees were allegedly connected to each other through a series of off-market transactions.

The entities devised a scheme wherein Prabha Bhandari got shares of the company transferred off-market from an entity who was connected to one of the directors of the company, the order noted.

Thereafter, the noticees, as part of the scheme, traded amongst themselves to establish an artificial price, which was not supported by company financials and corporate announcements, during a special pre-open session, Sebi said while imposing the fine.

Through a separate order passed on Thursday, the watchdog levied a fine of Rs 2 lakh each on Puneet Garg and Praveen Bhutani & Sons (HUF) for fraudulent trading in the shares of Focus Industrial Resources Ltd (FIRL).

During the probe, Sebi found that Garg and Praveen Bhutani & Sons (HUF) along with other connected entities, including Parmanand Yadav Group, created artificial volume in the scrip of FIRL by repeatedly executing off-market and on-market transactions.

The entities indulged in trades with one leg in off market and the reverse leg on the market, which had resulted in creation of artificial volume in the scrip of FIRL, leading to false and misleading appearance of trading in the scrip, Sebi said.

By doing so, they violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

In a separate order, the regulator slapped a fine of Rs 4 lakh on Yuvraj Securities for misusing the funds of credit balance clients towards meeting the obligations of debit balance clients.

Further, the broker failed to segregate securities and moneys of clients, monthly/ quarterly settlement of funds and securities, among others.

In two other separate orders, two individuals have been fined Rs 2 lakh each in the matter of Sai Prakash Properties Development Ltd for their failure to comply with the summons issued by the regulator.

According to a separate order, the watchdog imposed a penalty of Rs 2 lakh on an individual for his failure to submit the desired details/ information/ records/ documents sought during an investigation.