Mumbai: Market regulator Sebi has imposed a total penalty of Rs 27 lakh on three promoter entities of GEE Ltd for alleged fraudulent trading in the firm's shares.
The Securities and Exchange Board of India (Sebi) slapped a fine of Rs 18 lakh on Vidya Finvest, Rs 6 lakh on Sanwarmal Agarwal and Rs 3 lakh on Shankarlal Agarwal.
Shankarlal Agarwal is also the Managing Director of GEE, while Sanwarmal Agarwal is the Executive Director of the company, a Sebi order dated January 31 said.
The case relates to Sebi's probe into trading in shares of GEE between April 28-August 31, 2009.
During the probe period, the price of the GEE shares rose by Rs 42.20 in 26 trading days with an average daily volume of 7,290 shares.
Prior to the investigation period, the scrip traded in the range of Rs 28.35 to Rs 39 with an average daily volume of 3,182 shares, Sebi said.
It was alleged by the regulator that Vidya Finvest, Sanwarmal Agarwal and Shankarlal Agarwal -- part of the "Agarwal group" -- along with the entities of one "Sanganeria Group" dealt majorly in the scrip during the period of probe.
Sebi observed that almost the entire upward price variation of the shares was caused by these groups.
Large quantity orders were placed by them during May and June 2009. All these orders were not reflected in the trade log, Sebi said.
Further, in most cases the entire quantity was revealed in the market. It was alleged that the orders were placed much below the prevailing market price and hence could not get executed.
In its three similar-worded orders, Sebi said that the three entities had contributed to the increase in Last Traded Price (LTP)of GEE and also "created artificial buying depth in the market by placing the orders significantly away from the market price and indulged in manipulative, fraudulent and unfair trade practices while dealing in the scrip of GEE".
Sebi observed that Shankarlal Agarwal contributed to a LTP increase of Rs 6.30, Vidya Finvest (Rs 44.45) and Sanwarmal Agarwal (Rs 7.95).