Market watchdog SEBI has slapped a cumulative penalty of Rs 23 lakh on six individuals, including three promoters-directors of Riba Textiles Ltd (RTL), for carrying out fraudulent trades in shares of the company.

In two separate orders released on Friday, SEBI has imposed “a penalty of Rs 20 lakh jointly and severally” on RTL promoter- directors - Ravinder Kumar Garg, Amit Garg and Nitin Garg - as well as Asha Garg, who was person acting in concert with them for violation of norms on ‘Prohibition of fraudulent and unfair trade practices relating to the securities market’

Besides, the market regulator has slapped “a consolidated penalty of Rs 3 lakh” on a couple - Ketan Nalinkant Shah and Hemal Ketan Shah - for executing reversal trade in the scrip of RTL which had led to “false and misleading appearance of trading in the scrip and hence is fraudulent in nature”.

The case relates to SEBI probe into the trading in the scrip of RTL during the period January 1, 2009 to August 31 2009 wherein the price and volume of the scrip had increased significantly.

According to SEBI, RTL promoters and Asha Garg “had transferred shares in off market to one Manish Ratilal Shah who in turn along with 13 group entities had used the shares to execute circular trades, synchronised trades, reversal trades and self trades in the scrip of RTL”.

This had resulted in creation of artificial volumes in the said scrip leading to false and misleading appearance of trading in the scrip and had also artificially increased the price of the shares.

In the case of Ketan and Hemal, SEBI noted that the “husband and wife have executed reversal trades in the scrip over a period of time and that too in large volume”.

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