Sebi directs 13 entities to disgorge over Rs 1.6 cr unlawful gains

Sebi has directed 13 entities to disgorge over Rs 1.6 crore of unlawful gains made by them while trading in the shares of Sarang Chemicals.

The market regulator during an investigation conducted during January to June 2011 found that the 13 belonged to a group of entities that traded among themselves, which created artificial volume and misleading appearance in trading in the scrip, Sebi said in an order on Monday.

The trades had resulted in the increase of price of the shares from Rs 0.31 to Rs 0.90. The entities by off-loading shares at increased price, made unlawful gains of Rs 1.60 crore, it added. Therefore, the Sebi has directed the entities to disgorge unlawful gains along with 12 per cent interest per annum calculated from the respective dates of their transactions till the respective dates of payment.

By indulging in such trading activities, the entities have violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.

"The modus operandi adopted by the noticees .... combined with the connections between the group entities who traded among themselves created artificial volume in the market and thereby generated interest among other innocent investors and thereby manipulated the price of scrip of Sarang," Sebi said.

Accordingly, the Securities and Exchange Board of India (Sebi) has directed Amrut Securities, now known as Amrut Dredging and Shipping Ltd, and 12 other individuals to disgorge a total amount of Rs 1,60,76,904 along with 12 per cent interest per annum.

Separately, the regulator levied a fine of Rs 10 lakh on the former director of Polo Hotels Ltd, Kaushik Namji Maru for disclosure lapses regarding change in his shareholding pattern.

"Several transaction of the noticee were through off-market transactions in a non-transparent manner and the consequential change in shareholding were also in clandestine manner without disclosing the required details to the public shareholders within stipulated time," the regulator said and thereby violated insider trading and SAST (Substantial Acquisition of Shares and Takeovers) norms.