Sebi fines Rs 51 lakh on 8 entities for violating regulatory norms

Capital markets regulator Sebi on Tuesday levied fines totalling Rs 51 lakh on eight entities for indulging in fraudulent trading practices in the matter of Ejecta Marketing Ltd.

The regulator slapped the fine in the range of Rs 2 lakh to Rs 10 lakh on Mayur Maheshkumar Panchal (Noticee 1), Jay Kamleshbhai Bhavsar (Noticee 2), Hiteshbhai Mistri (Noticee 3), Bhansali Value Creations (Noticee 4), Fastner Machinery Dealers Pvt Ltd (Noticee 5), Bhavishya Ecommerce Pvt Ltd (Noticee 6), Anurodh Infrastructure Ltd (Noticee 7) and Patel Malay Shaileshbhai (Noticee 8).

The order came after Sebi received a complaint from ICICI Securities Ltd alleging, inter-alia, that certain short message services (SMSs) were being circulated, recommending the purchase of the shares of Ejecta Marketing Limited (EML).

Thereafter, the regulator conducted a probe into the trading in the shares of EML for the period December 2017 to February 2018.

The regulator found that a concerted strategy was adopted by Panchal, Bhavsar and Mistri in collusion with Fastner Machinery, Bhavishya Ecommerce, Anurodh Infrastructure and Shaileshbhai, whereby (Noticee 1, 2 and 3) were repeatedly placed and deleted very large buy orders so as to create a fictitious appearance of trading and to induce the investors to trade in an illiquid scrip and further provide an exit option to (Noticee 5 to 8) in the shares of EML, thereby violating PFUTP rules.

The regulator also noted that Bhansali value creations was a Sebi-registered intermediary and broker of Panchal, Bhavsar and Mistri.

However, when (Noticee 1 to 3) placed the order in large quantities and deleted a substantial portion of it, it was the duty of the Bhansali value creations to inform its clients that the trading pattern was manipulative and would not reflect the true and correct picture of the shares of EML in the market and the interest of investors.

Also, it should have restrained them from doing such type of practice.

However, the entity failed to do so, thereby violated the code of conduct of Broker regulations.

Meanwhile, in a separate order, the regulator imposed fines totaling Rs 4 lakh on 3 entities for flouting insider trading rules and takeover regulations in the matter of Gokul Solutions Ltd.