Sebi slaps Rs 1 crore fine on 86 entities for fraudulent trading

Capital markets regulator Sebi on Friday imposed a fine of Rs 1 crore on 86 entities for manipulation in the shares of Sunrise Asian Ltd. In its order, the regulator levied a fine of Rs 1 crore on Sunrise Asian Ltd (SAL), its five former directors and 80 connected entities.

The amount has to be paid jointly and severally by the entities. Sebi had conducted an investigation into the scrip of Sunrise Asian for the period October 2012 to September 2015, based on a reference received from the Principal Director of Income Tax (Investigation), Kolkata.

Under a scheme of amalgamation, Sunrise Asian and its then directors had devised a fraudulent mechanism whereby 80 connected entities had manipulated the price of the scrip in four patches of trading during the investigation period. Further, 77 out of the 86 entities were counterparties to the sale of shares by 1,059 entities/allottees at artificially inflated or manipulated prices, thereby violating rules.

Of the 86 entities, two have passed away and one has settled the case with Sebi. "However, noticees 1 to 6 (SAL and its whole time directors) had devised an arrangement in collusion with noticees 7 to 86, whereby through a combined and collective strategy and had executed series of trades among themselves and had manipulated the price of the scrip during the investigation period," Sebi Adjudicating Officer Soma Majumder said.