SEBI Imposes Penalty of Rs1.62 Crore on 9 Entities for Fraudulent Trading
Moneylife Digital Team 23 June 2022
The Securities and Exchange Board of India (SEBI) has imposed a combined fine of Rs1.62 crore on nine entities for manipulating shares of Sterling Green Woods Ltd.,(SHWL) during the period April-July 2009. The regulator levied a fine of Rs18 lakh each on  Radhe Krishna Broking, Harshad Panchal, Hemang Shah, Umesh Patel, Abhishek Soni, Sonal Patel, Dhaval Soni, Anurag Agarwal and Paksh Developers Pvt Ltd.
 
In its order, SEBI noted that SAT vide an order date 2 March 2022, has allowed the appeals filed by the entities against the SEBI order.
 
The tribunal had remanded the case back to SEBI for fresh order on merits after giving an opportunity of personal hearing to the appellants.
 
Passing a 107-page order, the regulator found that there were nine entities along with few others, collectively called Hemang Shah group, were connected to each other and also traded in the scrip of SGWL, SEBI said in an order.
 
Further, Paksh Developers and its director Anurag Agarwal had provided the money (through bank account of Paksh) as well as the shares of the company (through selling the shares by Paksh) to the Hemang Shah group entities.
 
Thereafter, they rigged the price up by placing both buy and sell orders at higher price and accumulated the shares while creating artificial volume in the scrip, the regulator noted.
 
Further, the market watchdog observed that when the price of the scrip reached its highest level in July 2009, the entities sold off their shareholding in the same month. The price was increased by the trades of Hemang Shah group entities, SEBI said.
 
The nine entities made a profit of Rs54 lakh by creating artificial volumes, rigging prices and selling shares in July 2009.
 
By doing so, the entities have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices).
 
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