Sebi bars Ruchi Soya, National Steel in castor seeds fraud case
On March 2, Sebi had barred 16 brokers and traders from the securities market for manipulation in castorseeds trading at NCDEX
Sebi barred Ruchi Soya Industries and National Steel and Agro Industries from the securities market for alleged fraudulent and manipulative in trading in castor seeds at the NCDEX.
The latest crack down for irregularities in the commodities derivatives market comes less than three months after it banned 16 brokers and traders from the securities market for manipulation in castor seeds trading at the bourse.The two companies have been barred from "buying, selling or dealing in the securities market, either directly or indirectly, in any manner whatsoever, till further directions", Sebi said.
"... I, prima facie, find that the acts and omissions of Ruchi Soya Industries Ltd and National Steel and Agro Industries Ltd has, not only disturbed market equilibrium, but also indicate manipulative and fraudulent design to form a cartel and corner the castor seed market," Sebi Whole Time Member Rajeev Kumar Agarwal said in the order.
He noted that prima facie Ruchi Soya Industries and National Steel and Agro Industries being part of 'Ruchi group entities' have violated the position limits prescribed by erstwhile Forward Markets Commission (FMC) in October and December 2014.
Noting that detailed investigation of entire scheme, plan, device and artifice employed by concerned entities is necessary, Sebi said the role of four other entities funded by Ruchi Soya Industries -- Stride Multitrade Pvt Ltd, Bharat Foods Co-operative Ltd, Anuj Jain and Sisne Polymers Pvt Ltd.
These four entities were among the 16 against whom action was taken by Sebi through its order on March 2.
"The connected entities, acting in concert under a premeditated plan, have acquired dominant market share in castor seed contracts traded at NCDEX.
"Their acts, conduct, behaviour and dealings connote a deceptive conduct designed to deceive or defraud market participants and by camouflaging/ masking their actual position in castor seed, they have interfered with free market forces of supply and demand," Sebi said in the latest order.
Allowing the entities that are prima facie found to be involved in such fraudulent, unfair and manipulative transactions to continue to operate in the market would shake the confidence of the investors in the commodities market, it added.
On March 2, Sebi had barred 16 brokers and traders from the securities market for manipulation in castorseeds trading at NCDEX (National Commodity and Derivatives Exchange).
These entities had either traded or facilitated trade of castorseed contract at the leading commodity bourse. NCDEX had suspended trading in castor seed contracts on January 27, 2016, pursuant to which Sebi had also launched its probe in respect of trading in these contracts at NCDEX for the period beginning January 1.
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The SEBI order follows a probe conducted between September 2013- December 2015 to ascertain violation of Prohibition of Insider Trading (PIT) norms by the entities.