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Sebi fines 50 lakh on 10 entities in illiquid stock options case

The Securities and Exchange Board of India observed a large-scale reversal of trades in the stock options segment of the BSE.

Published: 26th January 2022 11:17 AM  |   Last Updated: 26th January 2022 11:17 AM   |  A+A-

SEBI building (File Photo | Reuters)

SEBI building (File Photo | Reuters)

By PTI

NEW DELHI: Markets regulator Sebi on Tuesday imposed a penalty totaling Rs 50 lakh on 10 entities, including individuals, for indulging in non-genuine trades in illiquid stock options at the BSE.

In 10 separate orders, the regulator has levied a fine of Rs 5 lakh each on Amigo Trexim, Gracier Commodities, Gomati Devi Soni, Goldmoon Realcon, GKS Reality, Nikhil Jalan and Sons HUF, Begum Gulerana, Arpita Sikaria, Goutam Jain and Sons HUF, and Dharam Bir HUF.

The Securities and Exchange Board of India (Sebi) observed a large-scale reversal of trades in the stock options segment of the BSE.

It noted that such a large-scale reversal of trades in stock options lead to the creation of artificial volume at the BSE.

In view of the same, the regulator conducted an investigation into the trading activities of certain entities in illiquid stock options at the BSE for the period between April 2014 and September 2015.

Pursuant to the investigation, it was observed that over 2.91 lakh trades comprised a substantial 81.38 per cent of all the trades executed in the stock options segment of the BSE during the investigation period were non-genuine trades.

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The non-genuine trades resulted in the creation of artificial volume to the tune of 826.21 crore units or 54.68 per cent of the total market volume in the stock options segment of the BSE. It was observed that these 10 entities were among the various entities that indulged in the execution of reversal trades in the stock options segment of the BSE.

According to Sebi, these entities were instrumental in the creation of artificial volume in the illiquid stock option contracts at the BSE during the investigation period by executing reversal or non-genuine transactions in the illiquid stock options segment at the exchange.

By indulging in such trades, they violated the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, Sebi said.

In a separate order, the regulator has levied a fine of Rs 1 lakh on Anbazhagan for violating insider trading norms related to the shares of Titan Company. Anbazhagan, who was one of the employees of Titan, had transacted in securities of the company in the quarter ended March 2019.

Anbazhagan was required to make disclosures to Titan for the transactions within two working days as the traded value of Anbazhagan's transactions in the scrip of the company exceeded Rs 10 lakh. However, he did not make such disclosures.

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Through a separate order, Sebi imposed a penalty of Rs 3 lakh on Parinee Realty for non-compliance with the provisions of the LODR (Listing Obligations and Disclosure Requirements) norms. The regulator had conducted an examination to ascertain the compliance status of the company with relevant provisions of LODR rules for the April-October 2019 period.

Separately, Amrita Prabhakar Deodhar has settled with Sebi a case related to alleged disclosure lapses in the matter of APLAB Ltd after paying Rs 3.31 lakh towards settlement charges.

Deodhar, who was individually holding a 24.35 per cent stake in the company, acquired an additional 0.85 per cent holding in July 2021 by way of inter-se transfer as a gift. The acquisition resulted in an increase in the shareholding of the applicant to 25. 20 per cent, which was in excess of the threshold of 25 per cent as prescribed under the SAST (Substantial Acquisition of Shares and Takeovers) rules.

Under the rules, the acquisition was eligible for exemption and, in turn, the applicant was required to make the disclosure to the exchanges four days prior to the acquisition. However, the same was made with a delay of six days. In view thereof, the applicant was alleged to have violated the SAST norms, according to the order.



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