Here’s why SEBI fined 15 Individuals with a fine of Rs 87 lakh

SEBI slapped 15 individuals with fine of Rs 87 lakh for manipulating the share price of Kapil Raj Finance.

SEBI has fined 15 individuals with Rs 87 lakh in violations of falsely inducing investors to trade in the scrip of Kapil Raj Finance. SEBI basically invested the trades in the scrips of Kapil Raj Finance conducted by certain entities during the period of January to April 2018.

SEBI’s adjudicating officer G Ramar said, “I note that they (individuals) engaged in circular trading without changing beneficial ownership, contributing to nearly 80 percent of circular trading volume, and thereby creating 22.2 percent of trading volume, which was non-genuine and artificial, which created a misleading appearance of trading”.


Why the Fine?

SEBI stated that by such circular trading, these entities generated artificial volumes of trade of the scrips of Kapil Raj Finance. This induced investors to engage in buying shares of Kapil Raj Finance.

Circular Trading is illegal in India. SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 observes circular trading as a fraudulent or unfair trade practice. To protect investor interests SEBI actively monitors and punishes instances of circular trading.

Who Are These Entities?

Nikhil Kiritbhai Panchal, Naileshkumar Ganeshbhai Prajapati, Jay Kamleshbhai Bhavsar, Krunal Bhupendrabhai Makwana, Nilesh Kishanbhai Pandya and Chandakant Sevantilal Thakkar, Vyomesh Patel, Yogendra Bhupendra Vekaria, Vipul Pushpavadan Shah, and Vinay Madhukar Chavan have each been slapped with a fine of Rs 5 lakh while SEBI has also imposed fines of  ₹8 lakh each on Divyaben Hiteshbhai Gangani and Pardhi Dhirubhai Khanabhai and  ₹7 lakh each on Bhavin Natwarlal Panchal, Deepak Parsharam Salvi, and Ravikumar Vinodbhai Parmar.