Shares of Welspun Corporation, Ackruti City, Murli Industries and Brushman fell sharply by up to 27%, a day after the Securities and Exchange Board of India (SEBI) restrained the promoter groups from dealing in their shares till further orders on grounds of indulging in unfair trading practices.
The regulator also banned Sanjay Dangi and his associates and the Ashika Group from accessing the securities markets. The regulator exposed a nexus between these companies and some stockbrokers to manipulate the stocks and rig its share price before issuance of convertible bond and private placements to institutional investors.
“Dangi group along with the promoters of various companies had indulged in fraudulent and unfair trade practices relating to securities market,” said the Sebi order.
Welspun share prices crashed 26.8% and that of Ackruti and Murli Industries fell by 20% and 19.9% respectively during the day. Brushman (India) share prices fell by 5%. The affected partied are, however, looking to approach higher authorities for relief against the order.
“We (constituent of promoter group) believe that we are in full compliance with the prevailing rules, regulations and guidelines,” said Welspun Wintex in a statement.