North End Foods Marketing and its Managing Director Sandeep Sabharwal have settled the case against them with Sebi for holding stocks more than the prescribed limit in mentha oil futures on MCX by paying ₹45 lakh each.
The showcause issued by Sebi alleged that the company and Sabharwal through the connected entities had devised a plan through which NEFM has acquired the ultimate beneficial ownership of a substantial percentage of exchange-specified stock of Mentha oil, which are tradable at the exchange.
Allegedly, by actively concealing its ultimate beneficial ownership of Mentha oil stock, acquired through connected entities, NEFM intentionally created false and misleading appearance of trades wherein it was the de-facto beneficial owner/ trader but the trades were done by its connected entities without disclosing their connection with NEFM.
The act of concealment was devised in order to deliberately mislead the market and get hold of a dominant stock position in Exchange-specified quality of Mentha oil and to circumvent the SEBI circular on position limit compliance, said Sebi.
Last December, both the company and its Managing Director moved a settlement application of ₹45 lakh each. The high powered committee accepted the settlement and amount was paid in February, said Sebi.