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The Bag Board and Exchange of India (SEBI) on Tuesday prohibited the textile firm LS Industries from the Stock Market for alleged manipulation of the price of fraudulent actions and practices. The market regulator said that LS Industries had a market capitalization of 22.7 billion rupees in the peak.
LS Industries, despite having a market capitalization of 5,768 million rupees, reported minimum income in the last three fiscal years. An investigation carried out by Sebi revealed that in October 2022, former director Ruet Meng Chay transferred his total participation of 12.12% in the company to Nri Jehangir Jehangir Panikkaveettil Perumbarambathu, based in Dubai, in an agreement outside the market, according to news .
Although the transferred shares were valued at approximately 154 million rupees according to a price of the RS 15 action, the transaction took place at a significantly lower price of RS 75 or $ 1 per share. Sebi’s consultation discovered suspicious purchase orders made by multiple entities within the limits of the circuit greater than 9 am, which leads to a significant increase in the price of shares. These actions resulted in an increase of 11 times in the price of shares in a short period of two months.
The regulatory agency has issued a temporary order that prohibits LS Industries LTD (LSIL), together with its key promoters and individuals, to participate in the negotiation of their actions and participate in the stock market until new notice, due to the accusations of manipulating the prices of the actions.
This action follows an investigation by Sebi in LSIL, a textile company that has reported minimum income. Despite not registering sales in two quarter of the 2015 fiscal year, the price of LSIL shares experience RS 42.39 in November.
Sebi’s investigations discovered an alleged bomb scheme and fall that involved a group of merchants, including the PVT of Multipiers Share & Stock Advisors. Ltd. and Setu Pvt Securities. Ltd. It was found that these entities had made purchase orders in the limits of the upper circuit from the beginning, which led to artificial inflation of the price of the action. Subsequently, they proceeded to download shares, which resulted in a significant fall in the value of the action.
The Sebi will carry out an exhaustive investigation before May 15. Meanwhile, Sebi has ordered the NRI to provide a complete list of its assets, investments and bank accounts, as well as freeze any withdrawal of its accounts.
