Sebi has barred an individual from the securities market for two years for indulging in fraudulent trading activities in the shares of Voltaire Leasing and Finance Ltd (VLFL).
In April last year, the individual, Harivallabh Mundra, was restrained by Sebi from accessing the securities market for two years.
Sebi, in the last order, noted that preferential allotment of shares of VLFL was made to one of the off-market transferors -- Looklike Trade Pvt Ltd -- in FY 2013-14. The investigation period was from August 12, 2014, to July 31, 2015.
The subsequent trading pattern of these sellers had contributed to an increase in the net and positive last traded price of the company, as per the regulator.
It was also held that the premeditated scheme to manipulate the share price of VLFL was a fraudulent activity and that Mundra was part of it.
The individual had appealed to the Securities Appellate Tribunal (SAT) against the order, mentioning that he had filed a reply on October 15, 2019, which was not considered by Sebi.
Thereafter, the tribunal quashed Sebi's earlier order and the regulator was asked to consider the matter afresh and take into consideration all other factors as well as give an opportunity of hearing to Mundra (noticee). "I hold that the noticee, by virtue of being an Executive Director of the Company, was in charge of its affairs at the time of the violations and along with the other entities party to the Show Cause Notice, is part of the scheme," Sebi's Whole Time Member Madhabi Puri Buch said in the order passed on Monday.
{{/usCountry}}Thereafter, the tribunal quashed Sebi's earlier order and the regulator was asked to consider the matter afresh and take into consideration all other factors as well as give an opportunity of hearing to Mundra (noticee). "I hold that the noticee, by virtue of being an Executive Director of the Company, was in charge of its affairs at the time of the violations and along with the other entities party to the Show Cause Notice, is part of the scheme," Sebi's Whole Time Member Madhabi Puri Buch said in the order passed on Monday.
{{/usCountry}}The scheme was set in motion right from the allotment of shares to Looklike in FY 2013-14 for manipulating the price of the scrip of VLFL during August 12, 2014, to July 31, 2015 period, she added.
According to the latest order, in the two-year ban period, the period of restraint already served by Mundra from the date of the initial order in April 2020 till the date of the SAT order will be included, Sebi said.
Among others, the order said that if the noticee has any open positions in any exchange traded derivative contracts, he can close out/ square off such open positions within three months from the date of order or at the expiry of such contracts, whichever is earlier.