SAT upholds Sebi order in Aditya International case

The Securities Appellate Tribunal today upheld market regulator Sebi's order against an individual in a case of fraudulent dealings in shares of Aditya International.
In 2013, the Securities and Exchange Board of India had imposed a penalty of Rs 5 lakh on Saumil Bhavnagari for his involvement in price manipulation in the company's scrip on many instances.
Bhavnagari approached SAT challenging the ruling.
In an order today, SAT said: "It is an accepted state of affairs that in cases of manipulation of the volume and/or price of a particular scrip, it is usually an arduous task to obtain direct evidence.

"However, the analysis of the trade and order logs as undertaken...Establishes the malafide intention of the appellant (Bhavnagari)."
SAT noted that Bhavnagari had executed trades between December 2003 to January 2004 and from the nature of the trading, it was clear that he had sought to create a misleading impression that a large number of persons were trading in the shares of Aditya International.

Sebi had found that the share price rose from Rs 65 to reach a high of Rs 307 on February 13, 2004 and thereafter fell to Rs 25.70 on June 1, 2004.
Bhavnagari had manipulated the price by placing orders at prices higher than the 'Last Traded Price' and had influenced the price of the shares.

The Sebi order had said: "By purchasing at a higher price in most of his trades, the noticee (Bhavnagari) had given the wrong impression about the price of the scrip in the market. Therefore, the price of the scrip was manipulated with low trading volume in the scrip.