Sebi bars 19 entities for involvement in mid-cap stock crash

Market regulator Sebi has barred 19 entities from the securities market after an initial probe into the recent share price plunge in some mid-cap stocks, including Parsvnath, Tulip Telecom and Pipavav Defence.

The move follows an initial probe into the plunge of 20-26 per cent in the shares of Parsvnath Developers, Pipavav Defence and Offshore Engineering, Tulip Telecom and Glodyne Technoserve on July 26 at the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

Sebi said the accused entities continuously sold the shares at prices lower than the last traded prices to bring down the share prices

Sebi said a sharp downward movement was noticed in these stocks between 0915 and 0949 hours on that day. These stocks witnessed sharp intra-day price volume movement on both BSE and NSE on July 26, although no major corporate announcements or price sensitive information was disclosed to the exchanges by these companies during previous 15 days.

Passing an interim order against these entities, which includes individuals and companies having dealt in these stocks, Sebi said it would expeditiously complete its investigations into the matter.

The entities restrained from accessing the securities market and prohibited from buying, selling or dealing in securities in any manner whatsoever include 4a Financials Securities, A To Z Steels, Ajit Kumar Jain, Cheminare Trade Comm, G N Credits, Gajria Jayna Precision Industries, Kuvam Plast Pvt Ltd, Littlestar Vanijya Pvt Ltd, Manish Agarwal and Milestone Shares & Stock Broking Pvt Ltd.

The others among the 19 barred entities include Neelanchal Mercantile Pvt Ltd, North Eastern Publishing & Advertising Co, Passions System Solution, Premium Hospitality Services, Ramkripa Securities, Umang Nemani, Venus Infosoft, White Horse Trading Co and Yashika Holding Pvt Ltd.

These persons and entities can file their objections, if any, within 21 days from the date of this order, Sebi said in the order passed today.

After analysing the trading activity of major clients, NSE and BSE found that some of these clients were not only common across these scrips but they also traded on both the exchanges.

A further probe into the matter found that the top identified clients whose sell volume constituted a significant share of the total sale transactions in these stocks accounted for up to 95 per cent of the total sale transactions.

Sebi said the analysis of trade data showed that these traders were instrumental in pushing down the prices of the concerned stocks, as they were observed to be placing the sell orders below the best sell prices as well as the best buy prices available on various occasions.

Also, during the day, many entities related to the some of the traders were top net sellers in these scrips.

The regulator further said relationships have been established among some of the clients as per information available in its surveillance system, KYC details available with the stock exchanges, MCA databases and other publicly available sources.

Among others, Neelanchal Mercantile Private Ltd and Milestone Shares & Stock Broking Pvt Ltd have a common phone number and a common Kolkata address. Flex Trade Pvt Ltd, Adish Jain and Manish Agarwal also have common phone number and a common address in Kolkata.

Milestone Shares & Stock Broking Pvt Ltd, Ajit Kumar Jain and Manish Agarwal were also found to have a common phone number.

Ajit Kumar Jain is director in Mukesh Trade & Finance Ltd, which shares its phone number with Divya Drishti traders Pvt Ltd, which along with a few other related entities have been previously debarred from trading in market in the matter of creation of artificial market and price manipulation in scrip of Tijaria polypipes ltd.


Sebi said the accused entities continuously sold the shares at prices lower than the last traded prices to bring down the share prices

Updated Date: Dec 20, 2014 19:07 PM

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