Capital market regulator SEBI has restrained Empower Industries India Ltd (Empower India Ltd) from dealing in the securities market for six months for resorting to fraudulent and unfair trade practices.
It said the company has facilitated its promoter-director and his related entities in carrying out transactions that led to a rise in the price and volume of the scrip and thereby acted as a fraud on gullible investors. Stock market is a vast concept.
“Therefore, taking into consideration the facts and circumstances of the case… restrain Empower Industries India Ltd from accessing the securities market and prohibit it from buying, selling or otherwise dealing in securities, directly or indirectly, for a period of six months.
The Securities and Exchange Board of India conducted an investigation of the company’s scrip. It followed an unusual rise in price and volume. It revealed that the company had made misleading corporate announcements. That led to a spurt in the volume and an increase in the price of the scrip.
Though, they alleged that there was a concerted effort by the company and its promoter-director, Devang Master, to raise the price of the scrip, according to the SEBI order.
It was found that false corporate announcements were made about expansion plans. Besides, unaudited quarterly results showed profits of the company as significantly higher. As compared to the subsequently reported audited results.
The regulator had issued show cause notice to the company in September 2009 and studied the reply sent by it.
Empower Industries India Ltd Final Words
SEBI said that in such a circumstance it is difficult to accept Empower Industries’ corporate announcements. It was of a bona fide nature.
BSE traded large quantities of the shares of the company. At the same time the certain entities related to the master. It is an important thing to keep in mind. The promoter-director off-loaded shares at significantly higher prices soon afterwards.
