Sebi slaps Rs 95 lakh fine on 16 entities for fraudulent trading in Dwitiya Trading scrip

Markets regulator Sebi on Tuesday levied a total fine of Rs 95 lakh on 16 entities for executing fraudulent trading in the scrip of Dwitiya Trading Ltd.

The regulator has fined the entities in the range of Rs 5 lakh-Rs 10 lakh each for violating the Prohibition of Fraudulent and Unfair Trade Practices norms.

The Sebi order follows a probe conducted by the regulator in the scrip of Dwitiya Trading between August 2014 and August 2015.

It was observed that certain entities by controlling the supply of shares played a crucial role in manipulating the price of the scrip.

"This clearly shows that their selling pattern was not normal and was solely directed towards pushing up the price of the scrip of DTL (Dwitiya Trading Ltd)," Sebi noted.

It further added that the trading pattern adopted by the entities resulted in creation of artificial interest in the scrip of DTL which gave a false and misleading appearance of trading to the investors and more investors started trading in this scrip which was also a reason for sharp price rise.

Besides, some entities also contributed positively to the last traded price and fraudulently raised the scrip price of DTL.

Consequently, the regulator has imposed monetary penalties on the enitites that include Panchshree Logistics, Faithful Cloth Merchants, Reachsmart Construction, Reachsmart Dealtrade, Crown Iron Merchants, Indrawati Nirman, Dhyaneshwar Dealers, Original Fashion Traders, Anurodh Infrastructure and Fastner Machinery Dealers, among others.

Separately, Sebi imposed a fine of Rs 10 lakh on Inventure Merchant Banker Services Pvt Ltd for lack of due diligence with respect to the material facts to be disclosed in the prospectus of Aanchal Ispat Ltd, for which it was acting as the lead manager to the issue.

Besides, there were disclosures lapses on the part of merchant banker with respect to submission of half-yearly periodic report and there were material discrepancies in the information about compliance officers and key managerial personnel.

The merchant banker violated Issue of Capital and Disclosure Requirements Regulations as well as code of conduct for merchant bankers.

Through a separate order, Sebi levied a total fine of Rs 4 lakh on three directors of Siddarth Businesses Ltd, currently known as Shivamshree Businesses Ltd for trading in the shares of the company exceeding the threshold limit without obtaining pre-clearance of trade which is in violation of insider trading norms.

The directors are Prafulbhai Parshottambhai Bavishiya, Shailesh Bhai Parshottambhai Bavishiya and Arunaben Prafulkumar Bavishiya.