Securities and Exchange Board of India (SEBI): Maninder Cheema, Adjudicating Officer, imposed a total fine of Rs 80 lakh on eight entities for indulging in fraudulent trading activities in the shares of PMC Fincorp Ltd.
It was found by the regulator, that the entities created artificial demand in the PMC shares by continuously buying shares at increasing prices and then holding on to the shares purchased by them, thereby also reducing the shares held by the public.
The trades of the entities during the investigation period were found to be manipulative in nature, leading to an artificial price rise with the motive to provide exit to large shareholders who sold their shares at artificially inflated prices.
It was of the opinion that, “the fundamentals of the company did not justify the high prices and no prudent investor would continue buying at increasing prices unless motivated by some other consideration. The fact that the Noticees 1 to 8 were connected as established above leads one to conclude that the demand for shares was artificially created with a view to causing an artificial increase in price. The Noticees purchased and continued to hold the shares, while at the same time buying at increasingly higher prices, thus inducing an upward movement in price”.
It further found that Noticees 1 to 8 created an artificial demand in the scrip of PMC during the IP by continuously buying shares at increasing prices and then holding on to the shares purchased by them, thereby also reducing the shares held by the public. And further noted the fall in the price of the scrip after the sustained buying.
Noticees 1 to 8 through their trading in the scrip manipulated the price of PMC in violation of Section 12A (a), (b), (c) of SEBI Act read with Regulation 3 (a), (b), (c), (d), 4 (1) and 4 (2) (a), (e) of PFUTP Regulations. And therefore, were liable for monetary penalty under Section 15HA of the SEBI Act. A penalty Rs 10,00,000/-(Rupees Ten Lakh only) each on Noticees 1 to 8i.e.Economy Suppliers Private Limited (Noticee 1), Embassy Sales Private Limited (Noticee 2), Seabird Distributors Private Limited (Noticee 3), Seabird Vincon Private Limited (Noticee 4), Seabird Retails Private Limited (Noticee 5), Shivdarshan Sales Private Limited (Noticee 6), Famous Investment Consultants (Noticee 7) and Rolex Vinimay Private Limited (Noticee 8) (Total penalty of Rs.80,00,000/-(Rupees EightyLakh only) was imposed.[PMC Fincorp Ltd., In re, ADJUDICATION ORDER NO. Order/MC/HP/2020-2021/10676-10683, decided on 26-02-2021]