Sebi slaps Rs 60 lakh fine on 12 entities for non-genuine trades in scrip of Tilak Finance

Markets regulator Sebi has imposed a total penalty of Rs 60 lakh on 12 entites for indulging in fraudulent trading in the scrip of Tilak Finance.

After observing a sharp price rise in the scrip of Tilak Finance, Sebi conducted an investigation between April 2013 and March 2014.

During the investigation it was found that some of the entities had positively contributed to the price rise of the scrip with their buy orders by deliberately matching their orders at prices higher than the last traded price (LTP).

The regulator also noted that the rise in price of the scrip was not supported by fundamentals of the company or any corporate action.

"In a normal market condition, when supply is not matched by similar demand, it leads to a price fall. However, in the present case I find that the Noticees created an artificial price rise by absorbing whatever sell orders were available in the market even if they were at a price higher than LTP," Sebi said in two similarly worded separate orders.

The regulator said the entities "indulged into manipulative trades that resulted into increasing the price of the scrip of Tilak Finance. The Noticees have further, contributed to positive LTP and NHP (New High Price) with their trades to establish a higher market price and thus manipulated the price of the scrip".

By doing so, the entities have violated provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations.

Consequently, a fine of Rs 5 lakh each has been imposed on Insight Multitrading, Esaar(India) Ltd, Rupak Developers Pvt Ltd, Olympia Multitrading Pvt Ltd, Surface Finance Pvt Ltd, Garth Mercantile Pvt Ltd, Moryo Industries Ltd, Isairis Trading Pvt Ltd, Goodpoint Impex Pvt Ltd, Shallot Tie-Up Pvt Ltd, Topwell Properties Pvt Ltd and Shallot Dealtrade Pvt Ltd.

Besides, in three separate orders, Sebi imposed a penalty of Rs 10 lakh on S. Sukumar HUF and Rs 5 lakh each on Sanghi Steel Udyog Pvt Ltd and Roopam Steel Rolling Mills for executing fraudulent trades, which created artificial volume in the illiquid stock options segment of the BSE.

The entities have been fined for violating provisions of PFUTP norms.

The orders are in accordance with Sebi's announcement in April 2018 to take action in a phased manner against 14,720 entities for fraudulent trade in the illiquid stock options segment.