Sebi slaps Rs 2.5 cr fine on 19 entities for fraud

The Securities and Exchange Board of India has imposed the levy on these entities including the then promoters of SJ Corporation

Market regulator Sebi has slapped a total penalty of Rs 2.5 crore on 19 entities for indulging in fraudulent trading in shares of SJ Corporation.

The Securities and Exchange Board of India has imposed the levy on these entities including the then promoters of SJ Corporation. They would be “jointly and severally liable to pay the said monetary penalty.”

These entities have “indulged in fraudulent and unfair trade practices by manipulating the price and traded volume of the scrip and dealt with securities in a fraudulent manner by indulging in acts which created misleading appearance of trading and also caused artificial rise in the price of the scrip”, said the Sebi order dated August 26.

Besides, they have “employed deceptive scheme and engaged in acts, practices or course of business in connection with dealing in securities of companies listed on stock exchange which operated as fraud or deceit upon the investors in securities”, it added.

By indulging in such activities, they have made notional profit to the tune of over Rs 132 crore.

The capital markets watchdog, through an interim order in February 2010, had already barred 16 of these entities from accessing the securities markets till further directions. This order, which was further confirmed by Sebi in December 2010, is still in force.

Sebi had conducted a probe in share trading of SJ Corporation between March, 2008 and October, 2009 and found that the company’s scrip was highly illiquid but had registered a substantial price rise.

The stock price had registered a surge of around 1,981 per cent during the investigation period.