Sebi upholds fraud order against 12 entities including V Marc India

Sebi affirms fraud order: Sebi confirmed its earlier order with some changes against 12 entities, including the promoter of V Marc India Ltd, for fraudulent activities aimed at manipulating the company's share volumes and prices.

The 121-page confirmatory order, which includes modifications, restrains these entities from participating in the securities market.

Sebi's whole-time member Ananth Narayan G stated in the order, “I hereby confirm the directions of the interim order dated February 28, 2024, with modifications. The total liability for the alleged illegal gains to be impounded stands modified to Rs 6.30 crore as Jai Kishorr Singhal has deposited the alleged illegal gains made by him.”

Subject to further probe

The regulator highlighted that the observations in the present order are tentative and subject to further investigation. Future proceedings may be initiated based on the investigation's outcome, without influence from the interim or current order.

Sebi found that the entities' submissions were insufficient to refute the initial conclusions drawn in the interim order. Consequently, the interim order's findings that the entities engaged in a fraudulent scheme to manipulate V Marc India's share price and volume were confirmed.

Initially, Sebi's February interim order barred the 12 entities, including V Marc India Ltd's promoter, from the securities market and impounded Rs 6.38 crore of wrongful gains from the manipulative scheme. The case involves fraudulent trading in V Marc India's shares, orchestrated by the promoter, company management, and associated parties.

Funds channelled for manipulation

The order stated that V Marc's promoter and MD Vikas Garg and former Whole Time Director Sandeep Kumar Srivastava engaged Prijesh Kurani to "operate the market." Kurani, using his own and connected trading accounts, manipulated the scrip with funds channelled through entities connected to Garg.

The fraudulent scheme began when the scrip was listed on April 8, 2021. Alongside Garg, Srivastava, and Kurani, Sebi barred Sudhir Gupta, Dharini Kurani, Rekha Kurani, Surbhi Aggarwal, Vinod Vilas Sable, Seema Garg, Madhu Srivastava, Jai Kishorr Singhal, and Seema Agarwal.

Sebi's investigation, covering April 9-30, 2021, was supported by data from Kurani's mobile device, seized during a search operation related to the 'Front Running of Trades of Axis Mutual Fund.' The data, including WhatsApp messages and a signed agreement between entities, provided crucial evidence.

Garg challenged Sebi's interim order in the Securities Appellate Tribunal, which directed Sebi to pass a fresh order within four weeks. The tribunal later extended the deadline to July 30.

(With PTI Inputs)