Sebi slaps Rs 25-lakh fine on Triveni Management in ASCL case

Market regulator, the Securities and Exchange Board of India (Sebi), has imposed a penalty of Rs 25 lakh on Triveni Management Consultancy Services for fraudulent trade in the Asian Star Company Ltd (ASCL) stock and failing to comply with norms for stock brokers.

The regulator said it found the stock broker had placed manipulative orders for ASCL shares in the accounts of its clients. “Gains per se were made by the noticee (Triveni) in that it executed trades in the scrip in a manner meant to create artificial volumes and liquidity which is an important criterion, apart from price, capable of misleading the investors while making an investment decision,” Sebi said in an order issued on Thursday.

Sebi noticed a spurt of about 19 per cent in the price of ASCL shares between October 10 and November 20, 2008. During this period, the BSE 30 stock index, Sensex, had dropped over 19 per cent. Sebi observed certain entities connected to each other had indulged in circular/reversal synchronised trading in a manner that led to creation of artificial volume in the scrip.

These entities are collectively referred to as the "Mehta Group" by Sebi.

Recently, in a separate order, Sebi had penalised one Sunil Mehta as being the main conspirator behind the manipulative trades in ASCL shares.

Besides charging Triveni for aiding and abetting Mehta, the regulator also found that it funded the transactions of Mehta Group and failed to abide by the code of conduct for stock brokers.

The broker was also noted to be the largest contributor to the volumes to the scrips.