Circular trading traps 10 companies penalizing to Rs 34 lakhs total

Mumbai, Jan 14: Securities and Exchange Board of India, SEBI imposed fine to 10 entities of 34 Lakh rupees as fraudulent trading in Mindvision Capital. 

"The scheme, plan, device, and artifice employed by the notices in this case of circular trading, tantamount to fraud on the securities market in as much as it involves manipulative transactions in securities and misuse of the securities market.

"It is established that the acts of notices by indulging in circular trades were not just a coincidence and the same indicates their concerted effort and manipulative intent to create a false and artificial volume of the scrip," Sebi said in its order dated January 11.

The Securities and Exchange Board of India (Sebi) had conducted an investigation into the trading activities of the company between June 2009 and February 2010.

The probe found that the entities were connected to each other and executed circular trading in the scrip of Mindvision, which resulted in the creation of the artificial volume.

By indulging in such trading activities, the entities have violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations.

The entities had failed to make requisite disclosures under the provisions of Substantial Acquisition of Shares and Takeovers (SAST) and Prohibition of Insider Trading (PIT) norms.

Accordingly, Sebi has slapped a fine of Rs 5 lakh each on the two entities, while Universal Credit & Securities, Mahesh Ramanlal Shah, Kumar Raichand Madan, Fast Track Entertainment, Pooja Vinay Jain, Pragjibhai Mohanbhai Sukhadiya, Manjulaben P Sukadiya and Mangilal C Doshi HUF have been fined Rs 3 lakh each.