Markets regulator Sebi has confirmed its interim order banning 112 entities for tax evasion and money laundering besides misusing stock exchange mechanism, while a detailed investigation is on against several others.
The regulator, via an interim order dated March 29, 2016, had barred 246 entities, including the above 112, from markets after they were found to have indulged in a web of ‘make-believe’ trades to jack up share prices and entrap gullible investors.
The entities were found to be operating through various companies linked to Kailash Auto group, which was later found to be almost non-existent with no operation taking place at its registered offices.
As per the interim order, they have booked a profit of Rs 1,600 crore through fraudulent trades. In its latest order, Sebi said the entities “have acted in connivance for implementation of dubious plan, device and artifice that has led to the misuse of stock exchange mechanism to artificially increase price and volume of the scrips to provide illegitimate gains to the beneficiaries in order to claim long-term capital gains (LTCG) benefits.”
Such actions have “not only eroded the market integrity but have also been detrimental to the interests of investors who might have been lured to invest in the scrips due to such manipulative and fraudulent trading in the scrips and price movement,” Sebi Whole-Time Member Rajeev Kumar Agarwal said.
Accordingly, the Securities and Exchange Board of India (Sebi) has confirmed its interim order passed against the 112 entities. “The interim order dated March 29, 2016, shall remain in force till further directions,” Sebi said in its latest order. The entities include Kailash Auto Finance, its promoters Careful Projects Advisory Ltd (CPAL) and Panchshul Marketing Ltd (PML), among others.