Sebi on Friday imposed a penalty of Rs 1 lakh on Spark Online for allegedly indulging in fraudulent practices relating to scrip of GHCL Ltd.
In its order, Sebi (Securities and Exchange Board of India) said, “...hereby impose a penalty of Rs one lakh under section 15HA of SEBI Act on the Noticee, Spark Online for the violation of regulation...”
“...this penalty will be commensurate with the violations committed by it,” Sebi added.
It was alleged that Spark Online was linked to GHCL and its promoters. The entity was the alleged major beneficiary of false news related to equity investment by a Dubai-based company in GHCL.
According to a probe conducted by Sebi, a news item published on June 11, 2008, reported that Dubai—based Al Rustomani Group (ARG) was considering an equity investment of 25 per cent of GHCL at a cost of upto $200 million.
The news item allegedly resulted in a sudden spurt in price and trading volume of GHCL shares.
However, on November 15, 2009 ARG denied the report of its investment in GHCL, saying that a letter of ‘Expression of Interest’ was issued by its Corporate Development Head Kewal Thapar without the company’s authority.
ARG further submitted that there appeared to be some collusion between Thapar and GHCL.
It was found from the trading data from June 11—13, 2008 that the majority sellers in the scrip of GHCL were its promoter or promoter related entities.
During the investigation it was revealed that Spark Online sold 7.75 lakh shares of GHCL during the period when there was a major increase in price and volume in the scrip of the firm.
” The Noticee (Spark Online) appears to be connected to the promoters of GHCL and was aware of the false news item. It acted in collusion with the promoters of GHCL and sold shares of GHCL to unsuspecting investors” Sebi said.
Sebi also noted that after the news item was established to be false the scrip of GHCL came down rapidly causing loss to the investors.
“The Noticee (Spark Online) has made a wrongful gain and has transferred the loss to unsuspecting investors who invested in the scrip on the basis of false news,” Sebi added.
Keywords: Spark Online, GHCL Ltd, SEBI, penatly, violation of regulation, Al Rustomani Group, stock movement,
Comments:
SEBI should compensate all those investors who lost the money due to
this action. Instead SEBI recovered one lakh rupees from the perpetrators and lived happily.
What did sebi do for those investors.
SEBI Act 1992 enacted in the parliament to protect the investors from
any manipulation in stock market,but in reality it is found they are
protecting the interest of FRAUD COMPANIES AND BROKERS as a result
7000 listed companies vanished from market and investors lost more
than Rs.10 lkah cores,similarly during 2010-12 companies those came
out with public issue their share price fall by more than 90% for
example ARSS Infra issue price Rs.490.00 collected Rs.4900.00 cores
after listing price went up to Rs.1500.00 today it is just
Rs.36.00,Taksheel Solution issue price Rs.150.00 collected rs.100
cores price went upto Rs.186.00 today it is just Rs.10.00,Acropetal
Solution IPO price Rs.90.00 company collected Rs.171 cores price went
up to Rs.156.00 today Rs.13.00 Jupiter Bio Science collected Rs.450.00
cores from GDR,all the plants in India being closed,both acquisition
in India and abroad are false and fabricated share price went up to
Rs.220.00 today just Rs.6.00
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