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Kelvin Fincap Ltd and 43 other entities have been banned from buying and selling in the securities market till further directions.
In an ad-interim ex-parte order, SEBI restrained Kelvin Fincap Ltd from raising capital till further directions. The directions will continue to be in force pending investigation and passing of final order. The ex-parte order comes into effect immediately.
The regulator detected two time periods of huge rise in the price and volume of the scrip.
From June 18, 2013 to July 23, 2013 (period 1), the price of the scrip rose 48 per cent in 26 trading days from Rs 151.55 to Rs 225.
On July 24, 2013, the shares of Kelvin were split in the ratio of 1:1 and from July 24, 2013 to May 29, 2014 (period 2), the price of the scrip increased 353 per cent in 205 trading days from Rs 118 to Rs 535.
On analysing the trading activity in the scrip, SEBI observed that during the examination period, 361 related/connected entities had substantially traded amongst themselves in shares of Kelvin. This created artificial volume and contributed to the artificial price rise in the scrip, according to SEBI.
It was observed that prior to the examination period, shares of Kelvin had low liquidity, which increased substantially only after those related/connected entities commenced trading heavily.
SEBI noted their inter-relationship/connection from the KYC details, their bank statements, off-market transactions amongst themselves and information available on the Ministry of Corporate Affairs (MCA) website.
The entities have continued with their trading in the scrip in the same manner even after the examination period, observed SEBI.
Further, SEBI on April 25, 2014, found that the details of Board of Directors of Kelvin as available on the MCA and BSE websites were different.
The persons/entities against whom the order has been passed have been given 21 days to file their reply or avail themselves of an opportunity of a personal hearing.
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