Sebi levies Rs 1.83 cr fine on 29 entities for fraudulent trading in Dhanleela Investments' scrip

Markets regulator Sebi has slapped a total fine of Rs 1.83 crore on 29 individuals for indulging in fraudulent trading in scrip of Dhanleela Investments and Trading Company Ltd.

The regulator has imposed fine in the range of Rs 5 to Rs 15 lakh each on the individuals for violating provisions of Prohibition of Fraudulent and Unfair Trade Practices.

The order came after an investigation conducted by Sebi in the scrip of Dhanleela Investment between February 2013 and March 2015.

It was noted that the scrip opened at Rs 17.5 on February 26, 2013 and reached Rs 427.8 on October 09, 2013.

On October 10, 2013, the scrip opened at Rs 87.2 and thereafter reached a high of Rs 213.9 on December 05, 2013 and closed at Rs 90.3 on March 02, 2015.

Sebi during the probe found that the individuals had contributed to positive last trade price (LTP) as sellers.

"By their trades, the noticees were instrumental in establishing a price higher than the LTP and thus contributed to increased scrip price with each of their trades. Such trades would lead to an artificial rise in the price of the scrip and the same would misguide the general public," Sebi said in an order dated Thursday.

It further added that the acts of artificially increasing the price of scrip have the potential to mislead and induce gullible and genuine investors to trade in the scrip and harm them and, thus, the fundamental tenets of market integrity get violated with impunity due to such fraudulent acts.

Consequently, Sebi levied the monetary penalty on individuals and said "the modus operandi adopted by the noticees is detrimental to the smooth functioning of the securities market. It is also to be kept in mind that such acts as found in this case do not deserve leniency, and should be dealt sternly and be suitably penalized.