Mumbai: Sebi on Wednesday barred six entities from the capital markets for two years for indulging in manipulative trading in the shares of Biocon Limited in the cash market.
Those banned are — Gangwal Sunil Kumar, Vihit Investment, Mohd Faisal, AKG Securities and Consultancy, Paramount Incorporation and Minesh Jormalbhai Mehta (collectively referred to as noticees). In addition, the regulator has imposed a penalty of Rs 10 lakh each on them.
The penalty needs to be paid within 45 days. Sebi had conducted an investigation in the trading activities of certain entities in the scrip of Biocon. The focus of the investigation was to ascertain whether there was any violation of the securities laws by certain entities in the cash market on June 29, 2017 at NSE during the last half an hour of trading so as to benefit certain entities who were holding net long positions in the derivative contracts.
The regulator, in its probe, found that all the six entities had engaged in price manipulation in the scrip of Biocon at NSE cash market during the last half an hour on June 29, 2017 and managed to establish higher settlement price in the futures of Biocon.
“Noticees have acted as a group and had entered into these trades in the cash segment for the purpose of securing a higher settlement price in the futures market where noticees no. 2, 3, 4 and 6 (Vihit Investment, Mohd Faisal, AKG Securities and Mehta) had taken long position in the last half an hour on June 29, 2017,” Sebi noted.
These four entities had taken the long positions to increase their profit arising out of their long positions, it added. ‘.. noticees acted in concert to manipulate the settlement price in order to enable noticees no. 2, 3, 4 and 6, to make wrongful gains from their long position in futures,’ Sebi said in its 86-page order.
In addition, the regulator has directed these four entities to disgorge the unlawful gains made by them along with an interest of 12 per cent per annum. By indulging in such trades, all the six entities violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, Sebi noted.