Sebi Fines Rs 4 Cr for Share Price Manipulation

New Delhi, Jul 30 (PTI) Markets regulator Sebi on Wednesday imposed a penalty totalling Rs 3.87 crore on 11 individuals for manipulating the share price of Darshan Orna Ltd (DOL) using social media channels.

The fines need to be paid within 45 days, the Securities and Exchange Board of India (Sebi) said in its order.

In its order, Sebi noted that a multi-layered market manipulation scheme was orchestrated in the scrip of DOL during September 2021 to June 2022, involving these entities across three distinct operational tiers, whereby in tier 1, Noticee 1 (Aakash Doshi) accumulating the company's shares through his own account and those of his father Dilip Doshi, while Kevin Kapadia traded in his wife's account Kruti Kevin Kapadia and provided crucial funding support to other participants.

In tier 2, the funding infrastructure was bolstered by Satyen Dalal, who provided Rs 46 lakh in tranches to the Doshi family during the share accumulation phase and received back 90 per cent of these funds during the selling phase, demonstrating the scheme's temporary nature.

In tier 3, the message circulation network was meticulously coordinated through Dhanpal Gandhi, who served as the crucial link between the other entities and the Telegram platform, working in conjunction with Amesh Jaiswal and Jalaj Agarwal, who posted the recommendations on the Telegram platform TBO.

"The trading activities in the scrip coupled with messages on Telegram app created an impression of increased price and volume in the market, which had allegedly influenced the gullible investors to purchase the shares of DOL, and the same was evident from the fact that during the same time, the number of public shareholders witnessed a huge jump from 1,732 to 7,536 i.e. an increase by 335 per cent during the quarter of January 2022 to March 2022," Sebi said in its 81-page order.

Besides, the share price escalated from Rs 77 to Rs 146.7 during the period and a few individuals collectively profited Rs 2.51 crore while systematically exiting their positions.

By indulging in such trades, these individuals violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms and accordingly, Sebi levied a fine totalling Rs 3.87 crore on them. The penalty ranges from Rs 10 lakh to 1.2 crore.

The order came after Sebi conducted an investigation into the matter of trading activities of certain entities in the scrip of Darshan Orna based on recommendations that were circulated on the Telegram channel to ascertain possible violation of PFUTP norms. The period of investigation was from September 2021 till June 2022.