India’s market supervisory body, SEBI, issued a 4-year ban to seven entities owing to fraudulent trade practices – of Kailash Auto Finance scrips.
The debarred companies are Supernova Advertising, Eversafe Promoters, Subhankar Exim, Overall Vincom, Sarvottam Advisory, Akriti Advisory (also goes by the name Jagruti Infra Developers) and Bholebaba Suppliers.
These companies will not be able to access the securities for this. SEBI will freeze their prevailing holding of securities (like mutual fund units) during this term.
The regulator had investigated the stocks trading of Kailash Auto Finance (which lasted 3 years from 2013 to 2015) for any prevalent norms.
At the same time, the income tax department has notified SEBI of entities that had accumulated fake long-term capital gains through stock exchange in Kailash Auto Finance scrip among others.
During the scrutiny, they discovered that these seven entities were interlinked and also carried out sell trades in a fraudulent way to mislead investors. It came to their notice that the entities showed the scrip’s price higher than its real value and manipulated the share’s price.
This act of price manipulation is a direct violation of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) guidelines, SEBI iterated.
After wrapping up the investigation by the end of 2015, they passed an order to temporarily restrain them from the securities market till further notice. Now it is a confirmatory order.