Sebi imposes a fine of Rs 20 lakh on 5 entities for manipulating R.M. Mohite Textiles scrip price
New Delhi, September 3 () The market regulator, Sebi, imposed a total fine of Rs 20 lakh on five entities for manipulating the price of R.M. Mohite Textiles Ltd.
The regulator conducted an investigation in the script of the firm between October 2010 and April 2011 to observe the high volatility in the price of the shares.
During the investigation, Sebi observed that the company's scrip price had increased from Rs 255 on October 1, 2010 to Rs 380 on February 4, 2011. Subsequently, the price of the scrip began to decrease and touched Rs 123.15 on 8 April 2011 and finally closed at Rs 220.35 on April 29, 2011.
It was noted that the five entities were involved in price manipulation as they contributed to the last positive negotiated price (LTP) by trading among them.
The entities negotiated the firm's actions in a coordinated manner to artificially inflate the price, Sebi said in an order dated August 30.
In the light of the facts of the present case, the nexus observed between the notices and the way in which the notices have coordinated with each other to execute operations with a significantly high LTP establish conclusively that the exchanges of the notifications were not genuine and they were executed as part of an artifice/method used only to artificially manipulate the price of RMMTL, he added.
In doing so, the entities have violated the relevant provisions of the Sebi Act of 1992 and the Prohibition of the Regulations of Fraudulent and Unfair Commercial Practices. Consequently, the regulator imposed a fine of Rs 10 lakh on Bharatkumar Baldevbhai Parmar, Rs 5 lakh on Tushar Rameshbhai Patel, Rs 3 lakh on GGF Mercantile Pvt Ltd and Rs 1 lakh on Heena Rameshbhai Patel and Vipul Hiralal Shah. SRS RVK