Markets regulator Sebi Friday imposed a total penalty of Rs 27 lakh on four entities for indulging in fraudulent trade

New Delhi, Mar 23: Markets regulator Sebi Friday imposed a total penalty of Rs 27 lakh on four entities for indulging in fraudulent trade in illiquid stock options segment of BSE. Umapati Oil Mill and Ginning Factory, Yudhbir Chhibbar, Kasturbhai Mayabhai Pvt Ltd and Vimladevi Shyamsunder Khetan are the four entities, according to Sebi's separate orders. After observing a large-scale reversal of trades in the BSE's illiquid stock options segment, Sebi conducted a probe from April 2014 to September 2015.

Following the probe, the regulator found that the trades executed by the entities were not genuine as they were reversed within few seconds with same counter parties with significant difference in price, resulting in profit to the entities. Securities and Exchange Board of India (Sebi) said it was a deliberate attempt to deal in such a fashion and not a mere coincidence. The trades executed by the entities were not genuine and created an appearance of artificial trading volumes, thereby violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, Sebi noted.

Accordingly, a fine of Rs 8.7 lakh and Rs 8.4 lakh were imposed on Yudhbir Chhibbar and Vimladevi, respectively while a penalty of Rs 5 lakh each was levied on Umapati Oil Mill and Kasturbhai Mayabhai Pvt Ltd, totalling Rs 27.1 lakh. In a separate order, Sebi imposed a total fine of Rs 6 lakh on four promoters of Artech Power Products for delayed disclosures to exchanges regarding their change in the shareholding in the company.

 Ranjith Vijayan, I V Vijayan, Repsy Vijayan and Resmi Vijayan are the four promoters, according to Sebi's order. The promoters have deprived the vital information to the public by non-disclosure /delayed disclosure as mandated by the Takeover Regulations, Sebi noted.