Share price manipulation: Sebi imposes Rs 66 lakh fine on 19 entities

Markets regulator Sebi on Wednesday slapped a total fine of Rs 66 lakh on 19 entities for manipulating the share price of Ram Minerals and Chemicals Ltd (RMCL).

The penalty imposed on the 19 entities ranges from Rs 1 lakh to Rs 10 lakh.

"...by indulging in trades that resulted in manipulation of the price of the scrip and by indulging in a trading pattern which created misleading appearance of trading in the scrip, the noticees (19 entities)... violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations," Sebi said in an order.

All Time Buildtech Pvt Ltd, B G Freight Shoppe India, Delicious Diamonds Pvt Ltd, Ever Bright Trading Pvt Ltd, Anuradha Arora, South Asia Portfolios Pvt Ltd were among the entities fined by Sebi.

The Securities and Exchange Board of India (Sebi) conducted an investigation in trading of RMCL's shares during the period from December 2013 to July 2015.

Following the investigation, the regulator found that the entities were connected to each other through common address, email id, fund transfers among themselves and contributed towards establishing a positive last trade price (LTP), thereby increasing the price of the scrip.

"It must not be forgotten that every trade establishes the price of the scrip and the noticees' trading at higher than LTP resulted in the price of the scrip going up and were done with a view to set the price at a desired level and thereby influencing the innocent/gullible investors," Sebi said.

It is a fit case for imposition of penalty on the entities for having indulged in price manipulation, the regulator said while imposing fine on them.