SEBI Bans THESE 5 Entities From Securities Markets For 3 Years: Check List

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New Delhi: SEBI imposed a total penalty of Rs 50 lakh on five entities on Thursday. It has banned them from the securities markets for three years for the violation of regulations related to Bhatia Communications and Retail (India) Ltd. The regulator has directed the entities to return the wrongful gain of Rs 7.49 crore they made along with 12 percent annual interest from July 2022 until the payment date.

SEBI Imposes Ban on These 5 Entities

The Securities and Exchange Board of India (SEBI) has fined NNM Securities, Miker Financial Consultants, Vibhuti Commodities, Festino Vincom, and Nikunj Anilkumar Mittal Rs 10 lakh each. ()

NNM Securities, a SEBI registered market maker and stock broker was fined along with the other 4 entities. Bhatia Communications, originally an SME scrip moved to the main board platform in September 2020. "I find that the Noticees while executing trades in the scrip of Bhatia Communications during the investigation period (IP) has abused the stock market platform by creating false and misleading appearance of trading. ()

 "It is established that during the pre-split investigation period NNM Securities (in its proprietary account) and the other the noticees viz Miker Financial, Vibhuti Commodities, Festino Vincom and Nikunj were indulged in price and volume manipulation in the scrip of Bhatia Communications during the IP and resultantly attracted gullible investors to buy the shares of the company," Sebi's G Ramar said in the order.

Reason Behind SEBI's Action

The shares were offloaded at a higher price onto them during post-split investigation period making substantial profits, Ramar said.  If such activities are left unchecked, it will give wrong signals to the securities market, the order said.  "I am of also of the view that such fraudulent, manipulative and deceptive acts, device, plan and artifice employed by the noticees in this case have wider impact on the securities market and should be dealt with sternly," Ramar added.

By indulging in such activities, the entities have violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) norms. Further, Sebi said "with a view to increase the price and traded volume in the scrip are of serious and grave in nature and are inimical to the interests of participants in the securities market".

It clearly indicates that "all noticees acted as a group and conspired and connive with one another in executing the whole scheme of manipulation".  In July 2022, Sebi received a complaint, alleging that certain channels were uploading videos on Youtube to manipulate and offload shares of Bhatia Communications. 

Further, the scrip of Bhatia Communications was examined for price and volume manipulation during the probe period, and it was alleged NNM Securities, Miker Financial Consultants, Vibhuti Commodities, and Festino Vincom acted together to pump up the price of the scrip. (With PTI Inputs)