Over nexus with operators; broker Sanjay Dangi, 24 entities barred.
The Securities and Exchange Board of India (Sebi) barred the promoters of four firms and related entities from participating in the capital markets in an order passed on Thursday.
Evidence unearthed suggested that these companies had colluded with operators to pump up the price of shares prior to capital raising in the period from 2006-2009.
The order bars market participant Sanjay Dangi and 24 group entities including 14 associated with the Ashika group from the markets for helping promoters ramp up prices before public issues.
It also bars Murli Industries and 18 associated entities, Ackruti City and 13 associated entities, six entities associated with Welspun Group and one from Brushman India from the securities market.
"As a matter of policy, we follow fair business practices and respect the law of the land. We are taking legal advice to challenge the order with appropriate authorities," Vimal Shah, MD, Ackruti City said in response to the Sebi order.
Those named in the order have 21 days to file their objections to the order.
The Dangi Group was actively trading in the shares of many companies where there was capital raising through FCCB issue, ADR/GDR issue, QIB/QIP placement, preferential allotment or loans or pledge/revocation of pledge of promoter shares.
They were active in Ackruti City Ltd in the period from 2007-2009 prior to a qualified institutional placement.
In the case of the Welspun Group, they are said to have manipulated prices in the period from May-November 2009 prior to capital raising through foreign currency convertible bonds (FCCB).
There was also evidence of similar manipulation prior to a FCCB issue by Murli industries between October 2006 through to around mid-2007 and in the case of Brushman’s FCCB, it lasted between February 2008 till November 2008.
The Dangi group is also said to have links with the promoters of Arrow Textiles, Brabourne Enterprises, Delta Corp Ltd, Micro Technologies (India) Ltd, Resurgere Mines & Minerals India.
The Dangi Group entities had received shares in a preferential allotment or pre-IPO allotment which carried a lock-in period.
Stock exchanges have been asked to square off any positions that the entities have in the futures & options segment and ensure that fresh positions are not taken.
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