Market regulator SEBI on Thursday imposed Rs 10 lakh penalty on a Bharat Chandmal Jain for allegedly indulging in fraudulent trading practices in shares of Asian Star Company Ltd (ASCL).
The Securities and Exchange Board of India (SEBI) has alleged that Jain indulged in circular/reversal synchronised trades with other brokers and clients in ASCL shares.
SEBI said it was imposing “a penalty of Rs ten lakh...on the Noticee (Bharat Chandmal Jain) which will be commensurate with the violations committed by him “.
In a probe, SEBI said it noticed a spurt in the price ASCL shares during the period from October 10, 2008 to November 20, 2008. During the same period, the benchmark Sensex had dropped over 19 per cent.
SEBI alleged that Jain had carried out synchronised trading in scrips of ASCL through broker Triveni Management Consultancy Services.
According to the regulator, the intention of Jain was to create artificial volume in the scrip of ASCL and to influence the price of the scrip.
Stating that default by the entity was repetitive in nature, SEBI said there was substantial number of such trades repeated over a number of days during the investigation period.
SEBI also alleged that Jain had connections with the entities of Mehta group and executed large number of synchronised trades.
Last month, SEBI had slapped a fine of Rs 30 lakh on Sunil Mehta, one of the entities of Mehta group, and alleged that he was main conspirator behind the synchronised trading.
SEBI said repeated execution of circular trades, among others, by Jain with Mehta group entities leaves no doubt that “the Noticee (Jain) colluded with the connected entities to manipulate in the scrip of ASCL”.