SEBI has barred nine entities from the capital markets for up to three years for indulging in fraudulent trading in shares of Kinetic Capital Services Ltd and Shubh International Ltd, back in 1999.
The Securities and Exchange Board of India probe found that Gagan Securities, Unique Securities, G.K. Investments, Ajay Jain, Deepak Batra, Parveen Bansal, Rajesh Kumar, Asim Jain and Sunil Gupta were acting in concert to manipulate the share prices of the two firms.
SEBI also noted that Gagan Securities, Ajay Jain and Unique Securities were acting as sub-brokers without registration. Accordingly, the regulator has restricted them from accessing the securities market for 3 years.
Others have been prohibited for a period of one year.
The case relates to trading in scrip of the two firms during February 23, 1999 to May 21, 1999.
It was observed, among others, that during this period, the price of the shares of Kinetic increased from a low of Rs 20.60 on December 22, 1998 to a high of Rs 65 on May 17, 1999
Shubh International share price rose from Rs 19 on February 23, 1999 to Rs 48 on May 21, 1999 at Delhi Stock Exchange (DSE).
The market regulator said that the entities had repeatedly dealt in securities of Kinetic Capital and Shubh International (now known as Geetanjali Credit & Capital Ltd).
“Such repeated transactions in illiquid scrips in anonymous screen based trading are possible only through coordinated and deliberate matching of orders by the involved parties acting in league/concert with a premeditated understanding,” SEBI said.
“The noticees dealt in the illiquid scrips of Kinetic and Shubh with intent to tamper with free, fair and transparent price discovery system of the stock exchange and manipulate the prices of the scrips of Kinetic and Shubh,” it added.
