Sebi slaps Rs 20 lakh penalty on Sanghvi

Market regulator Sebi has imposed a penalty of Rs 2000000 on Niraj Sanghvi on charges of indulging in self trade that caused artificial rise in both share price and traded volume of Gulshan Polyols Limited (GPL). The market regulator examined GPL’s scrips for the period starting January 12,2006,till December 29,2006. “After taking into consideration all the facts and circumstances of the case... impose a penalty of Rs 2000000 under section 15HA of the Sebi Act,on the Noticee (Niraj Sanghvi)...,” The Securities and Exchange Board of India (Sebi) said in its order. The regulator,however,did not provide details regarding the identity of Sanghvi or his association with GPL. Section 15HA of the SEBI Act deals with fraudulent and unfair trade practices. GPL’s share price rose from Rs 44.70 in January 19,2006 to a high of Rs 103.40 on August 30,2006,due to self trade and synchronised trade by the concerned entity,Sebi said in its order. It observed that transactions revealed fraudulent intent of Sanghvi who traded in the scrip through different stock brokers using different names to avoid detection. “It is pertinent to note that such trading patterns lead to price fluctuation and creates a false appearance of trading in securities market and thereby tending to mislead the gullible investors,” the circular said. The market regulator also said that despite giving repeated reminders,Sanghvi failed to appear before it for defending its case. Subsequently,Sebi has passed the circular for penalty under ‘prohibition of manipulative,fraudulent and unfair trade practices rule’,it added. According to the circular,Sanghvi has to pay the imposed penalty amount within 45 days receipt of the order.