Jolly Plastic Industries case: Sebi imposes Rs 1.05 crore fine on 21 entities for fraudulent trading

Sebi has imposed a total penalty of Rs 1.05 crore on 21 entities for executing fraudulent trading in the scrip of Jolly Plastic Industries Ltd.

The regulator had conducted an investigation in the scrip of Jolly Plastic Industries Ltd between February 2012 and November 2014.

During the probe, it was found that these entities were connected and indulged in manipulating the price of the scrip downwards through a complex web of accumulating and distributing shares in the off-market.

Thereafter, executing market transactions among themselves at lower circuit filters price to bring down the price to facilitate certain entities to acquire shares at a lower price for various manipulative purposes.

Besides, they contributed to negative LTP (last trading price) by executing trades at lower circuit price every day.

The entities by trading amongst themselves below the LTP in the scrip manipulated and created a misleading appearance of trading in the scrip by such trade, the regulator noted.

Hence, the entities by indulging in fraudulent trade practices have violated the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.

The regulator has levied a fine of Rs 5 lakh each on 21 entities -- Aavia Buildtech, Aavia Softech, Accurate Buildwell, Aglow Financial Services, Anchal Goel, Ashok Kumar Jain HUF, Ashvin Verma, Bluechip Fincap Serve, Capital Securities, Century Buildmart, Lalit Mohan Gupta, Laxmikant Gaggar, Kanchan Bastimal Jain, Mould Trading, Ocean Share Brokers, Poonam Mittal, Ram Kumar Goyal, Steady Capital Advisory Services, Sure Portfolio Services, Surya Medi Tech, and Usha Jaiswal.

In a separate order, Sebi has imposed a fine of Rs 5 lakh on Sapna Dilip Bombaywala for fraudulent trading in the matter of Jolly Plastic Industries Ltd (JPIL).

Separately, the regulator has imposed a penalty totalling Rs 15 lakh on auditor M V Damania & Co (currently known as DNV & Co) and its partner Bharat Jain for wrongly certifying that Paramount Printpackaging utilised the IPO proceeds as per the objects of the issue.

They indulged in fraudulent trade practice by publishing such information that is not true and indulged in misleading advertisement as well as planted misleading news.

By doing so, they have violated the provisions of PFUTP norms.

Also, in another separate order, the regulator has levied a fine of Rs 5 lakh on Shashikant Keshavlal Shah for fraudulent trading in the matter of Well Pack Papers & Containers Ltd.

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