Sunteck Realty case: Sebi reduces penalties for five entities

Markets regulator Sebi on Friday imposed penalties totaling more than Rs 3.8 crore on seven entities, including six individuals, for carrying out circular trading in Sunteck Realty Ltd shares.

The total penalty imposed on five entities is less than the amount imposed on them through an order issued in December 2019.



As per the last order, the penalties were imposed on five entities equal to the illegal gains they achieved, while in the case of two others, the fine was Rs 5 lakh each.

In 2019, SEBI imposed fines totaling more than Rs 14.4 crore on the five entities, an amount that was double the illicit gains made by these entities.

As per the order passed on Friday, a fine of Rs 2,85,57,592 was slapped on Chiranjilal Jayaram Vyas while it was Rs 57,71,256 on Namdeo H More. Others facing penalties are Kishore Bhikaji Giri (Rs 356,506), Deendayal M Bohara (Rs 23,46,538) and Kishorilal Amrutlal Bissa (Rs 1,27,888).

Sebi had issued an order against the entities in December 2019 and they have moved the Securities and Exchange Court of Appeals (SAT) against the ruling.

In September 2021, the SAT returned the case to Sebi for reconsideration regarding the accounting of illegal gains made by the entities.

In both the orders, which were passed in December 2019 and Friday, the fines imposed on the two expatriates were Rs 5 lakh each.

While Jitendra Harivansh Joshi and Shripal Shares and Securities Ltd incurred losses, they were part of the group and played an active role in facilitating the manipulation of the company’s stock.

“Hence their violation is also serious. Therefore, considering the role they played, a fine of Rs 5 crore is imposed on each of them,” the order read.

SEBI investigation revealed some abnormal transactions in the company’s shares by certain entities/persons who were indulging in circular deals through the exchange as well as using the route of depository transactions in order to create artificial volumes in the stock.

The company was formerly known as Insul Electronics Ltd.

“It is noteworthy that Hon’ble SAT in its order dated September 27, 2021 endorsed the fraudulent activities carried out by the notices,” Sepe said in the order Friday.

Notifications are the seven entities.

“It is worth noting that even when these well-known/related parties were selling in the market in some cases, the entities were also buying these shares from the same parties in the market. Hence the shares sold by the front-end entities that created volume must be taken into account. To calculate the graft through notifications.”

(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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