On Monday, September 6, the SEBI(Securities and Exchange Board of India) banned 85 entities for over a year for fraudulent practices in capital market. Sunrise Asian Ltd and the other entities are held accused of exploiting the company’s share price. Considering the malpractices, SEBI put Sunrise Asian along with its five directors in restrain of a year, and the remaining 79 participating entities for over six months from the capital market.
In the regard of ascertaining if the entities have violated the provisions of the Prohibition of Fraudulent and Unfair Trade Practices(PFUTP) regulations, SEBI had previously directed an investigation against Sunrise Asian Ltd from October 16, 2012- September 30, 2015. The action was undertaken on the basis of an inkling provided by the Principal Director of Income Tax Investigation, Kolkata.
In the inquiry carried out, it came to an observation that in accordance with the allotment of shares under scheme of amalgamation, Sunrise Asian and its directors that time had chalked out a plan which was executed by 83 joined entities by manipulating scrip’s price in four trading spots while the investigation was going on. Consequently, it led to the violation of PFUTP regulations.
So much so, out of those 83 entities, 77 contributed in the sale of shares at manipulated and escalated price defying the provisions.
As a result of the investigation, proceedings carried out which led to an entity settling the case with SEBI. Furthermore, order passed on Friday concluded the prohibition of Coral Hub Ltd from carrying out any activities in the capital market for a period of three years and six parties for a period of 2 to 3 years for disobeying the rules.
These entities shrouded the company’s original financial results under their deception of presenting manipulated results during the year of 2008 to 2009 and from 2009 to 2010. However, to the regulator’s notice, they were found guilty of carrying out fraudulent practices and hence, got restrained from the capital market.
SEBI(Securities and Exchange Board of India)’s Overview
SEBI is an Indian regulatory body of securities and commodity market operating under Ministry of Finance, Government of India. It was created as a statutory body on January 30, 1992 under the SEBI Act of 1992. Its head office is established in Mumbai, Maharashtra. Ajay Tyagi is the current chairman of SEBI. The regulator is familiarized as the ‘watch-dog’ of the stock-exchange. SEBI is responsible for ensuring the transparency in Indian Capital Market. It protects the interests of the investors. Its regional offices include, Kolkata, Chennai, Ahmedabad, and New Delhi. The regulator discharges its functions to-
⦁ Issuer of the securities( Listed companies in the stock market)
⦁ Financial Intermediaries ( Brokers, NBFC, etc.)
Any individual who is aggrieved by the order of SEBI can approach to SAT ( Securities Appellate Tribunal).