SEBI slaps 50 lakh fine on 10 entities in illegal stock option case

In 10 different orders, the regulator has imposed a fine of 5 lakh each on Amigo Trexim, Gracier Commodities, Gomti Devi Soni, Goldmoon Realcon, GKS Reality, Nikhil Jalan & Sons HUF, Begum Gulerana, Arpita Sikaria, Gautam Jain & Sons HUF, and Dharam Bir HUF.

The Securities and Exchange Board of India (SEBI) witnessed a massive reversal of trades in the stock options segment of BSE. It was noted that such massive reversal of trading in stock options creates artificial volume on the BSE.

In view of the same, the regulator examined the trading activities of certain entities in illiquid stock options on BSE for the period between April 2014 and September 2015.

As per the investigation, it was observed that out of all the trades executed in the stock options segment of BSE, 81.38 per cent of over 2.91 lakh trades were non-genuine trades during the period of investigation.

Non-actual trades resulted in artificial volume creation in the stock options segment of BSE at 8262.1 million units or 54.68% of the total market volume.

It was observed that these 10 entities were among the various entities involved in execution of reversal trades in the Stock Options segment of BSE.

According to SEBI, these entities were instrumental in creation of artificial volumes in illiquid stock option contracts on BSE during the POI by carrying out reversal or non-realistic transactions in the illiquid stock options segment on the exchange.

SEBI said that by indulging in such trade, they violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.

In a separate order, the regulator has imposed a fine of 1 lakh on Anbazhagan for violating insider trading norms relating to shares of Titan Company.

Anbazhagan, who was one of the employees of Titan, transacted in the securities of the company in the quarter ended March 2019.

Anbazhagan was required to make disclosures to Titan for the transaction within two working days as the trading value of Anbazhagan’s transaction in the company’s shares was exceeded. 10 lakhs. However, he did not make any such disclosure.

SEBI imposed fine through separate order 3 lakh on Parini Realty for non-compliance of the provisions of LODR (Listing Obligations and Disclosure Requirements) norms.

The regulator had conducted an examination to ascertain the compliance status of the company with the relevant provisions of LODR rules for the period April-October 2019.

Separately, Amrita Prabhakar Deodhar has entered into settlement with SEBI after paying a case relating to alleged disclosure defaults in the case of APLAB Ltd. 3.31 lakh for settlement charges.

Deodhar, who personally held a 24.35% stake in the company, acquired an additional 0.85% stake in July 2021 through an inter-transfer in the form of a gift.

The acquisition resulted in an increase in the applicant’s shareholding to 25.20%, which was over and above the 25% limit prescribed under the SAST (Substantial Acquisition of Shares and Acquisitions) Rules.

Under the rules, the takeover was eligible for exemption and in return, the applicant was required to disclose to the exchanges four days prior to the takeover. However, it was made with a delay of six days. In view of this, as per the order, the applicant was accused of violating SAST norms.