SEBI slaps Rs 16 lakh fine on individual for fraudulent trade

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26 Aug, 2025 12:21

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Markets regulator SEBI has imposed a penalty of Rs 16 lakh on one Umashankar Agarwal for indulging in fraudulent trading in the securities of Somani Cement Company.

As per an order dated January 19, the Securities and Exchange Board of India (SEBI) had conducted an investigation in the share transaction of Somani Cement Company Ltd (SCCL) for the period from July 2004 to April 2005.

During the course of the investigation, Sebi observed that SCCL made several corporate announcements during 2004-05 which appear to be false and misleading in nature.

The shares of SCCL were traded on BSE for 161 days during the period July 2004 to April 2005 and immediately after the corporate announcements, the scrips witnessed a steep rise in price and traded volume.

In its order, the regulator noted that SCCL's chairman and director Bimlesh Kumar Mishra had transferred 41.31 lakh shares including unlisted excess scrips through various off- market transfers to a web of entities who in turn sold them in the market after the corporate announcements.

Agarwal had admitted to Sebi that he had sold 6.12 lakh shares of SCCL during the investigation period and got twenty five paise per scrip to sell them in the market.

Noting that Agarwal has committed serious offence by acting as a conduit or front for Mishra and aided him in offloading the fraudulently dematted excess shares of SCCL to the innocent investors, Sebi said that large number of investors were defrauded by purchasing the scrips.

"It is established beyond doubt that the noticee (Agarwal) had indulged in fraudulent and unfair trade practices in securities and indulged in acts which created false and misleading appearance of trading and price manipulation in the scrip of the SCCL and, therefore, violated... the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations," Sebi said.

Accordingly, the regulator has imposed a penalty of Rs 16 lakh on Agarwal.