sebi: Sebi slaps Rs 80 lakh fine on 8 entities for fraudulent trading activities

NEW DELHI: Sebi on Friday imposed a total fine of Rs 80 lakh on eight entities for indulging in fraudulent trading activities in the shares of PMC Fincorp Ltd. A fine of Rs 10 lakh each has been imposed on the entities.

An investigation was conducted by the regulator into the scrip of PMC Fincorp Ltd (PMC) for the period from March 29, 2012 to March 31, 2015.

During the probe, it was found that the entities created artificial demand in the PMC shares by continuously buying shares at increasing prices and then holding on to the shares purchased by them, thereby also reducing the shares held by the public.

Also, it was worth noting that once the sustained buying by the entities reduced and then stopped, the price of the scrip started to fall after the middle of December 2014, Sebi said.

As per the shareholding pattern of March 2015, it is evident that the combined shareholding of the entities reduced, indicating net sales and price of the scrip fell significantly during this period from around Rs 81 in end of December 2014 to Rs 41.90 by end of March 2015, as per an order.

The trades of the entities during the investigation period were manipulative in nature, leading to an artificial price rise with the motive to provide exit to large shareholders who sold their shares at artificially inflated prices.

The entities were found to have violated the provisions of PFTUP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.

In another order passed on Friday, fines of Rs 3 lakh and 2 lakh were imposed on Speciality Paper Ltd and Nemchand J Gala, respectively, for disclosure lapses.

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