SEBI bars 34 entities from market over fraudulent trade

The Securities and Exchange Board of India (SEBI) has barred 34 entities from the capital market for fraudulent dealings in the shares of 12 companies, including Allcargo Global Logistics, Lotus Eye Care Hospitals and KBS Capital.

The capital market regulator passed an order on Friday last restraining these entities connected with ''synchronized trading'' from accessing the capital market and prohibiting from buying, selling or otherwise dealing in the securities market, directly or indirectly, for various periods.

Accordingly, the market regulator has barred Sunil Mehta, the "main conspirator" in the alleged manipulative trades, from accessing the securities market for a period of seven years.

"Sunil Mehta envisaged a scheme for manipulation of prices and volumes of the selected scrips, and enlisted the assistance of certain other persons, who directly aided him in placing manipulative orders in the trading account of several persons...," SEBI said.

Based on the degree and nature of association with the fraudulent trades, SEBI barred 13 persons, including Anjana Mehta and Jitendra Jain Hemlata Hankare, Ajay Roongta, Bharat Jain, Suresh Hanswal, Praveen Gate, Manish Mathur, Bhavesh Kothari, Rakesh Jain, Bhavesh Jain, Naresh Rajawat and Hitesh Jain from accessing the securities market for periods of 5 years each.

The remaining 20 entities - Usha Mehta, Seema Mathur, Devendra Rai, Renu Paliwal, Rashmi Gandhi, Ramesh Gandhi, Hasmukh Jain (HUF), Pawanben Jain, Reeta Rajawat, Kunal Kothari, Sweta Kothari, Shobha Kothari, Neela Khicha, Namita Khicha, Kamlesh Jain (HUF), Vinay Kothari, Pradeep Kothari, Sitanshu Nanawati, Shaikh Jainuddin, Meena Rajawat – have been restrained from accessing the market for a period 3 years each.

The 34 entities are said to be connected with each other and have been found to be involved in synchronised and circular trading that created artificial volumes in the scrips of the 12 firms as well as for influencing their share prices.

These 12 firms are Allcargo Global Logistics, Asian Star Company, KSL & Industries, Mavens Biotech, Panoramic Universal, Rasi Electrodes, Sat Industries, Ushdev International, KBS Capital Management, Lotus Eye care Hospitals, MVL Ltd and Anil Products.

SEBI found that Mehta and Mehta's associates traded in the shares of the companies and used trading accounts of other linked persons to trade in synchronised, circular manner to manipulate the price and volume of the scrips.

SEBI said the period of debarment already undergone by these persons in terms of its earlier orders dated 20 February 2010 and 27 May 2011 in the matter will be taken into account while computing the periods of debarment ordered above.

The regulator had probed the irregularities in stock trading of the 12 firms from 1 March to 15 December 2009. It found huge changes in prices of these shares during the period.

Earlier, based on its preliminary probe, SEBI, through its interim orders in 2010 and 2011, had barred these entities except one Namita Khicha from the securities market, till further directions.

SEBI said the probe against Alpesh Rajmal Shah (HUF) and Anil Rajmal Shah (HUF) in the matter have not established their links with Mehta and will not continue.