Sebi slaps over Rs 2.5 cr fine on Roselabs Finance for flouting market norms

Markets regulator Sebi on Monday levied a fine of over Rs 2.5 crore on RoselabsFinance Ltd for violating market norms by conducting fraudulent trading in the scrip of Gujarat Arth Ltd.

The order comes after an investigation conducted by Sebi in the scrip of Gujarat Arth between October 2003 and January 2004.

Sebi noted that Roselabs and other promoters of Gujarat Arth were instrumental in issuing misleading corporate announcements on various instances.

The investigation revealed that the promoters and persons acting in concert (PAC) of the firm including Roselabs Finance "offloaded shares in the market through off market transfer in and around the time of misleading announcement made by the company which created artificial volume and impacted the price of the scrip thus defrauded the investors.," Securities and Exchange Board of India noted.

Besides, "they transferred shares in off-market and received back shares, which triggered more than 15 per cent of the paid up capital of the company before transferring again their entire holding in off market transaction," it added.

However, no public announcement was made and they failed to make requisite disclosures in accordance with the market norms.

Roselabs Finance violated Prohibition of Fraudulent and Unfair trade Practices (PFUTP) norms as well as Substantial Acquisition of Shares and Takeovers regulations.

The regulator thus imposed a fine of Rs 2,53,72,500 on Roselabs Finance.

In a separate order, Sebi levied a fine of Rs 7.2 lakh on Sri Navdurga Billets Pvt Ltd for indulging in fraudulent trading in the illiquid stock options segment on the BSE.

Sebi found that the firm violated PFUTP regulations by executing reversal trades in the stock options segment.