Sebi orders impounding Rs 4.18 crore gains in fraud trade case

Capital markets watchdog Sebi has ordered impounding of unlawful gains worth Rs 4.180000000 from 16 entities after finding them guilty of indulging in fraudulent trading in the shares of Polytex India These 16 entities included three companies - Shree Shagun Financial Services, Oliwonders Financial Services and Neevan Capital Markets."Considering the alleged connection amongst the 16 persons /entities, the manner of trading and specifically the fund movement... it is reasonable to view all of them as a 'group' and make them jointly and severally liable for the alleged illegal profits made while dealing in the shares of Polytex," Sebi said in an order.Accordingly, the regulator has asked these entities to impound the alleged unlawful gains of Rs 4.180000000, including interest.Securities and Exchange Board of India (Sebi), through an interim oder in May 2013, had restrained the 11 entities from the securities market for fraudulent trading in the shares of Polytex India, KGN Enterprises and Gemstone Investments.It had warned four individuals of "Pabari-Parikh Group" against trading through front entities in defiance of restraining orders against them. Later, these directions were confirmed by Sebi through another order in January last year.It was found that these individuals created artificial volumes in the shares of the three firms, substantially traded amongst themselves and placed orders at a price higher than the last traded price and thereby contributed to the rise in share prices of Polytex India and Gemstone Investments.