Sebi revokes trading ban on 20 entities in Kelvin Fincap case

Regulator Sebi has lifted trading ban on 20 entities which were alleged to have indulged in fraudulent trade in the shares of Kelvin Fincap Ltd, saying it did not find any "adverse evidence" against them.
The regulator's order came in the case related to Kelvin Fincap Ltd wherein various entities were prima-facie found to have artificially inflated the company's share prices.
The Securities and Exchange Board of India (Sebi) had conducted an examination into the dealings in the scrip of Kelvin Fincap Ltd (KFL) from June 2013 to May 2014.
The probe, prima facie, found that Kelvin Fincap had issued 1.3 crore shares in physical form to 56 related entities in March 2012. Thereafter, the shares of KFL were transferred among Kelvin Fincap Group entities in physical as well as dematerialised form after April 1, 2012.

Suddenly in June 2013, Kelvin Fincap Group entities dealt amongst themselves in the market thereby creating artificial trading volume. Such artificial volume constituted almost 96 per cent of the total market volume, Sebi had noticed.
"Kelvin Fincap Group entities adopted fraudulent device and artifice to defraud the genuine shareholders of KFL and have thus violated ...PFUTP (Prohibition of Fraudulent Trade and Unfair Trade Practices) Regulations," it had said.

Accordingly, Sebi in August 2014 had barred Kelvin Fincap and 43 others from the markets for alleged irregularities in trading of the company's shares. Subsequently, confirmatory order was passed against 42 entities, while it revoked trading ban against one entity and one person had passed away.

Following the interim order, Sebi conducted a detailed investigation covering the period from November 2011 to May 2014 in order to ascertain the violation of securities laws.
After completion of investigation, Sebi said it "did not find any adverse evidence/findings" against the 20 entities.
Accordingly, the watchdog, in an order passed on October 3, revoked the restrictions imposed on these 20 entities. However, Sebi said directions issued against the remaining 22 entities would continue.