Sebi levies Rs 28L fine on 7 firms for fraudulent trade

Securities and Exchange Board of India (SEBI) (DH File Image)

Capital markets regulator Sebi has slapped a total fine of Rs 28 lakh on seven firms for carrying out fraudulent trading in the scrip of Kailash Auto Finance Ltd.

Bholebaba Suppliers Pvt Ltd, Akriti Advisory Services Pvt Ltd, Sarvottam Advisory Pvt Ltd, Eversafe Promoters Pvt Ltd, Overall Vincom Pvt Ltd, Subhankar Exim Pvt Ltd and Supernova Advertising Pvt Ltd are the firms facing penalty.

The order follows an investigation carried out by Sebi in the scrip of Kailash Auto Finance Ltd (KAFL) during January 2013 to December 2015 after the watchdog noticed unusual price and volume movement in the shares of the company.

Sebi noted that the firms had created a misleading appearance of trading in the scrip and manipulated the price of the scrip and thereby violated provisions of the Prohibition of Fraudulent and Unfair Trade Practices norms.

"...Noticees had no genuine intention to sell the shares and the sell trades were executed in a fraudulent manner with a view to create misleading appearance of trading in scrip at higher prices and thereby manipulating the price of KAFL scrip," Sebi said in an order dated September 30.

Consequently, penalties in the range of Rs 1 lakh to Rs 7 lakh have been levied on the firms.

In another order on Monday, Sebi imposed a fine of Rs 16 lakh on the promoter of Pawansut Holdings Ltd -- Meera Mishra -- for failing to make required disclosures regarding her shareholding in the company.

Sebi observed that Mishra's shareholding in the firm had changed on various instances between June 2013 and September 2014 which triggered mandatory disclosures to be made under relevant market norms. However, Meera Mishra failed to do so.

"..by not making all the required disclosures, the Noticee failed to comply with their mandatory statutory obligation," Sebi noted. 

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