Market regulator Securities Exchange Board of India (SEBI) has imposed a penalty of Rs1.03 crore on 15 entities for manipulating the share price of Best Agrolife Ltd (BAL). The penalty, ranging from Rs5 lakh to Rs9 lakh, has been levied on these entities for creating a misleading appearance of trading and artificial volumes in the scrip of BAL. SEBI investigation revealed that the share price of BAL moved from Rs2.50 on 3 April 2018 to Rs1.399.70 on 4 November 2021.
In an order, Shashi Kumar Valsakumar, adjudicating officer (AO) of SEBI says, "The conduct of the noticees in manipulating the price of scrip of BAL and creating a misleading appearance of trading and artificial volumes in the scrip of BAL by entering into circular trades and synchronised trades and not complying with the summonses or reminder summonses and with the provisions of the SEBI Act, 1992 and SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations cannot be taken lightly. The violations done by the noticees are serious, therefore, should be dealt with sternly by imposing monetary penalty as effective deterrence."
The entities named in the order include: Bharat Bhushan (noticee 1), PRB Securities Pvt Ltd (noticee 2), Ramkumar Bholanath Yadav (noticee 3), Vijay Ishvarbhai Chauhan (noticee 4), Keyur V Parmar (noticee 5), Dhaval Mehta (noticee 6), Ritu Rahul Mehta (noticee 7), Kinjal Ronak Vora (noticee 8), Monik Chandubhai Ruparel (noticee 9), Dharmesh Mohanbhai Koshti (noticee 10), Dhaval Vinodbhai Gadani (noticee 11), Ronak Hasmukhbhai Vora (noticee 12), Harshadbhai Panchal (noticee 13), Surekhaben Thakkar (noticee-14), Dharmik Chauhan (noticee-15), and Ritesh Kumar Thakkar (noticee 16).
SEBI received numerous complaints regarding BAL, prompting them to forward these complaints to both, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), for analysis of potential price-volume manipulation. BSE thoroughly examined BAL stock from 3 April 2018 to 15 March 2022, showing a significant price increase from Rs2.50 on 3 April 2018 to Rs1,399.70 on 4 November 2021.
SEBI's investigation revealed that these entities engaged in small orders or trades, reversal trades, synchronised trades, and trades with connected parties, thereby contributing to price decreases and significant volume increases during the investigation period.
During the investigation period, SEBI analysed possible price and volume manipulation in BAL's scrip across seven different patches at BSE and three different patches at NSE, noting intermittent rises and falls in the scrip's price.
SEBI found that Bharat Bhushan (noticee no1) manipulated the price of the scrip of BAL and created a misleading appearance of trading in the scrip of the company. "All other noticees were group or connected entities, and traded exclusively among themselves without any intention of change of ownership of the security by entering into circular trades and synchronised trades, thereby creating a misleading appearance of trading and created artificial volume in the scrip of BAL, which was a significant part of the total market volume in the scrip during the investigation period (IP)."
Further, the market regulator says noticee no3 to noticee no16 also failed to appear before the investigating authority and submit or furnish the information sought through the summonses and reminder summonses, hampering the investigation process.
Bharat Bhushan executed 741 small buy trades in the scrip of BAL where the last trade price (LTP) contribution was positive. These 741 buy trades contributed Rs1,747.40 to positive LTP, i.e., 13.69% of the total market positive LTP of BAL. Out of the said 741 buy trades, the buy order quantity was one share for 279 trades (i.e. 37.65% of 741 buy trades), which contributed Rs385.45 to positive LTP. "Further, I note that buy order quantity was in the range of 1-10 shares for 458 trades (i.e. 61.81% of 741 buy trades), which contributed Rs1,452.95 to positive LTP, i.e., 11.38% of total market positive LTP during the patch two at BSE," the SEBI AO says.
