NEW DELHI: Markets regulator SEBI has directed 11 promoters and former promoters of Sumeet Industries to disgorge the unlawful gains, amounting to Rs 4.7 crore obtained through manipulative trading in the scrip of the company.
The regulator has asked the entities to disgorge the amounts of wrongful gains within 45 days along with an interest rate of 12 per cent per annum to be calculated from March 12, 2007, till the date of payment, Sebi said in its order passed on Monday.
The ruling came after the regulator carried out an investigation into the suspected price and volume manipulation in the scrip of Sumeet Industries between October 2006 and March 2007.
Sebi noted that the company had made a number of positive corporate announcements and some of these were not implemented and further, the factum of non-implementation of such corporate announcements was not intimated to shareholders.
Besides, it was observed that the major counterparty to the sales of promoter group entities was Purshottam Khandelwal who had placed buy orders for shares of the firm that created a false appearance of trading and apparently there was no genuine intention to trade in the scrip of Sumeet Industries.
In this regard, Sebi in May 2014, restrained the entities from accessing the securities market and also directed them to disgorge the wrongful gain of over Rs 4.69 crore.
However, the order was challenged in Securities Appellate Tribunal (SAT), which upheld the regulator's order but directed Sebi to calculate the quantum of unlawful gains "in accordance with any precise norms providing a rationale for arriving at the amount to be disgorged."
Accordingly, Sebi through a detailed methodology to calculate unlawful gains directed the promoter entities on Monday to disgorge over Rs 4.77 crore along with an interest rate of 12 per cent.
While calculating the interest amount, the period between the date of SAT order, i.e, June 30, 2016, to the date of Sebi order, September 30, 2019, shall be excluded, Sebi said.
In a separate order, Sebi asked managing director of Deep Industries, Rupeshbhai Kantilal Savla, to disgorge Rs 1.74 crore of illegal gain made through insider trading in the scrip of the company.
Besides, Savla has been barred from accessing the securities markets for a period of six months for violating the Prohibition of Insider Trading norms.