Market watchdog SEBI has slapped penalties totaling Rs 2 crore on seven entities. The reason is because of: indulging in fraudulent trading in shares of Kaveri Telecom Products (KTP).
The regulator had conducted a probe into trading of shares of Kavveri Telecom NSE 4.79 % for the period from June to December 2010.
The probe found that the average volume of shares traded in the scrip of Kavveri increased to 1,13,833 from 76,302. It increased in the immediate 3-month period before the start of probe.
However, the average volume of shares traded decreased to 1,00,062 in the immediate quarter after the probe.
Sebi found that these seven entities along with two other connected entities had created false or misleading appearance of increased trading in the securities market and artificially raised the volume in KTP shares by the way of synchronised and reversal trading, the regulator said in an order dated June 29.
SEBi found out this because of sudden increase in the volume of shares. Later the volume got back to its original size by SEBI.
By indulging in such activities, the entities had violated the regulations of PFTUP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, the regulator noted.
SEBI Imposes Fine
Accordingly, Sebi imposed a total fine of Rs 2 crore on these seven entities. Along with these 7 entities, other 2 entities connected in the fraud. Fine is imposed on other 2 entities too.
Individually, the regulator levied a fine of Rs 80 lakh on Dhirajlal Sanghvi HUF; Rs 50 lakh on Govind Kumar Varma; 30 Rs lakh on Sagar Dhirubhai Sanghvi;
Rs 15 lakh on Sunitadevi Sajjan Nanwal; 10 Rs lakh on Sajjankumar Nanwal; Rs 8 lakh each on Ashik Dhirajlal Sanghvi and Babubhai Desai).
Sebi in a separate order had also slapped penalties totalling Rs 1.6 crore on two entities, Antala Real Broking & Impex Private Ltd and Vishu Enterprises, for indulging in fraudulent trading in shares of Kavveri Telecom Products.
