Market regulator SEBI on Wednesday imposed a total penalty of Rs 5 lakh on two individuals for alleged fraudulent trade practices in shares of Betala Global Securities Ltd (BGSL).

In two separate orders, SEBI slapped a fine of Rs 2 lakh on one Dimple Shah and another Rs 3 lakh on Piyush Shah for manipulative and deceptive trading which led to creation of artificial demand and a false appearance of trading in the shares of BGSL.

“I am of the view that the facts of the present case clearly bring out an element of fraud and unfair trade practices indulged in by the noticee through brokers in connivance with other entities of Mahesh Mistry Group,” SEBI’s adjudicating officer P K Kuriachen said in similarly-worded orders.

In a probe conducted by SEBI, the regulator found a spurt in the share price of BGSL during May 2-November 21, 2003. The regulator said the company’s scrip price jumped by 254 per cent and a total of 1.54 crore shares were traded.

SEBI said a group of clients connected to each other and collectively referred to as ‘Mahesh Mistry Group’ traded in the shares of the BGSL. Both Dimple Shah and Piyush Shah were found to be part of the group.

Dimple Shah had acquired 54,300 shares valued at Rs 26.60 lakh and and sold a total of 7,910 shares for Rs 7.33 lakh of the company, SEBI said.

On the other hand, Piyush Shah bought 5.32 lakh shares for Rs 4.24 crore and sold 6.82 lakh shares for Rs 5.67 crore.

(This article was published on January 23, 2013)
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