SEBI penalises Gujarat CM’s HUF for 'Manipulative Trading'

In a blow to Gujarat CM Vijay Rupani, the market regulator SEBI imposed a penalty on the politician's Hindu Undivided Family (HUF), citing charges of manipulative trading on the entity. The market regulator has imposed penalties on 22 entities including Vijay Rupani’s HUF, levying a total penalty worth Rs. 6.9 crore on all the entities, according to media reports.
 
The report accusing Rupani’s HUF of undertaking manipulative trading through a company named Sarang Chemicals has hit the markets at a crucial time as the state of Gujarat buckles up for state-elections.
 
SEBI has directed Rupani’s HUF to pay Rs. 15 lakh, whereas the other individuals accused of the manipulative practices have been asked to deposit Rs. 70 lakh each or more. According to the market regulator’s report, the manipulative trades had occurred between January 2010 to June 2011 period.
 
The regulator had also issued show cause notice to all the 22 listed entities, including two brokers, for violations under the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP), related to securities market fraud. The notice had been issued for two categories including price manipulation, and misleading appearance and creation of fake volumes in the shares of Sarang Chemicals. Rupani’s HUF has been categorised in the second category. 
 
The report also mentioned that during the investigation period - January 2010 to June 2011, the 20 entities purchased shares accounting for 33 per cent of the market value, which were later sold for 86 per cent of the market value.