Sebi directs 7 entities to disgorge Rs 5.75 cr unlawful gains in Ruchi case




regulator on Friday directed seven entities to disgorge over Rs 5.75 crore of ‘unlawful gains’ made by them while indulging in manipulative trading in the shares of Industries Ltd.


The entities are — Aventis Biofeeds Pvt Ltd (now amalgamated with Immix Trade Pvt Ltd), Navinya Multitrade Pvt Ltd, Uni24 Techno Solutions Pvt Ltd, Sunmate Trade Pvt Ltd, Shreyans Credit and Capital Pvt Ltd, Betul Oils and Feeds Pvt Ltd and Betul Minerals and Constructions Pvt Ltd.



In an order, the regulator has asked the seven entities to disgorge the respective amount, along with interest at the rate of 12 per cent per annum, from September 28, 2012 till the date of actual payment.


The regulator had carried out an investigation into the trading activities of certain entities for the last half hour of trading between 15:00 hours to15:30 hours on September 27, 2012.


It was found that these seven entities were holding net long positions in the scrip of as on September 27, 2012.


observed that three entities as buyers placed buy orders in the scrip of at a price higher than the Last Traded Price (LTP) although sell orders were available in the system for the requisite quantity at lower price, during the investigation period.


This was done in order to increase the price of the scrip of Ruchi Soya in the cash market with a view to obtaining a higher settlement price of the futures of Ruchi Soya expiring on September 27, 2012.


Further, it was revealed that some of them as sellers, have colluded with their connected entities to increase the price of Ruchi Soya in the cash market to obtain a higher settlement price of the futures of Ruchi Soya expiring on September 27, 2012.


Also, through this manipulative scheme these entities established a higher settlement price of the futures of Ruchi Soya and these entities which were holding considerable long positions in the Ruchi Soya futures had avoided losses.


Thereafter, the entities benefitted from their positions in the futures of Ruchi Soya because of manipulation carried out by their connected entities.


As a result of the higher price, the entities were able to avoid losses in the futures of Ruchi Soya in the NSE futures market, said.


“Noticee nos.1, 2, 3, 4, 5 (Navinya Multitrade, Shreyans Credit and Capital,Aventis Biofeeds, Sunmate Trade and Uni24 Techno Solutions) …contributed to the price rise in the scrip of Ruchi Soya on the NSE cash market by artificially establishing a higher price in the scrip by placing buy orders at an unusually high price when sell orders at lower prices for the requisite quantity was available in the system,” Sebi said in its 59-page order.


As a result of the higher price, the seven entities were able to avoid losses in the futures of Ruchi Soya in the NSE futures market.


The entities have reduced their losses by Rs 5.76 crore through their manipulative trades, it added.


The market watchdog noted that during the investigation period, 61.63 per cent of the buy volume of the noticees were with other members of the group entities.


Therefore, irrespective of the volume traded amongst the group entities, the entities were responsible for establishing the higher price of the Ruchi Soya scrip in the last half an hour of trading in the NSE cash market on September 27, 2012.


By doing so, they violated the provisions of prohibition of fraudulent and unfair trade practices regulations.


Accordingly,Navinya Multitrade has been asked to disgorge Rs 1.09 crore,Shreyans Credit and CapitalRs 1.05 crore, Betul Minerals and Constructions Rs 1.04 crore, Aventis Biofeeds Rs 89.92 lakh,Betul Oils and Feeds Rs 81.92 lakh,Sunmate Trade Rs 67.2 lakh andUni24 Techno Solutions Rs 17.6 lakh.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)





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