Sebi bars 239 entities for making Rs 614 cr illegal gains

The manipulation in the traded volume and price of the scrip by a group of connected entities in this case, has not only resulted in enabling illegal benefit to a group of entities but also has potential to induce gullible and genuine investors to trade in the scrip and harm them, Sebi said.

"In the whole process, entities of Trading Group provided a hugely profitable exit to the preferential allottees and pre IPO transferees, Consequently, all the preferential allottees and pre-IPO transferees have collectively made a profit of Rs 614 crore," Sebi said.

The Securities and Exchange Board of India (Sebi) has now barred the four companies as well as 235 other entities, including many individuals, from the securities market. These entities have been "restrained from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner, till further directions," Sebi said.

Eco, Esteem and HPC are into the business of cultivation, processing and distribution of agricultural products while Channel Nine Entertainment is into production and distribution of television serials, films and events.

Sebi said that all the companies had very small share capital prior to the year 2011 and later they increased their capital base by issuing shares to several entities by way of preferential allotment and bonus shares.

All the companies came out with IPOs and the entities belonging to 'Funding Group' funded substantial portion of the IPOs and the proceeds of respective companies were immediately routed back to the entities of the 'Funding Group', the order said.

Thus, they financed their own IPO and allotted shares without receipt of consideration to the extent they returned the subscription monies to the Funding Group from IPO proceeds, Sebi noted.