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SEBI Fines 7 Entities For Violating Market Regulations

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Recent Events in the stock market prompted SEBI to act against seven entities for violating market regulations. These entities have engaged in fraudulent and manipulative trading activities, undermining the securities market’s integrity. Its actions demonstrate its commitment to enforcing market regulations and promoting transparency and fairness in the securities market.

Entities Fined By SEBI For Violating Market Regulations

SEBI imposed a fine of Rs. 62 lakhs on six entities for fraudulent trading practices. The six entities are Riddhi Siddhi Bullions, Riddhi Siddhi Bullions (India), Riddhi Siddhi Jewellers, Akash Agro Industries, Royal Tradelinks, and Royal Tradelink (India).

According to the regulatory body, these entities engaged in coordinated trading activities that manipulated the market price of shares of BSL Ltd. The watchdog found that the entities had placed buy and sell orders pre-determined to create an artificial volume in the market and influence the price of the shares.

This practice is known as “wash trading” and is illegal under Indian securities laws. The watchdog investigated the matter and found that the entities had violated several provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.

The regulator concluded that the entities had engaged in fraudulent and manipulative practices that harmed investors’ interests and undermined the securities market’s integrity.

SEBI imposed a fine of Rs. 62 lakhs on the six entities, fining each entity Rs. 10 lakhs as a penalty. The regulator also directed them to disgorge the unlawful gains made through fraudulent trading activities. They also barred the entities from accessing the securities market for six months.

In this case, the capital market regulator imposed a penalty to deter others who may engage in similar fraudulent trading practices. Moreover, it highlights the regulator’s commitment to maintaining the integrity of the Indian securities market and protecting the interests of investors.

What is the LODR violation?

Continue reading to learn more. The watchdog levied fines of Rs 11 lakhs on seven entities for violating regulatory norms to SS Organics Ltd (now known as Oxygenta Pharmaceutical Ltd).

SEBI found that a loan transaction of Rs 15 crore between ARR Capital Investment Pvt Ltd and SS Organics Ltd exceeded the firm’s turnover for FY2019-20, exceeding the limit of material transactions.

It also found that ARR was the related party of SS Organics Ltd, and the three directors of ARR held directorship at SS Organics Ltd on the loan transaction date. Despite this, SS Organics Ltd did not take shareholders’ approval for the loan transaction, nor did they consider ARR as a related party and obtain consent from the audit committee under the Listing Obligations and Disclosure Requirements (LODR) regulations.

Additionally, SS Organics Ltd did not make subsequent disclosures of related party transactions as required under the norms. Sai Sudhakar Vankineni, D Sadasiva Reddy, Gunreddy Krishna Reddy, Muralidhar Rambathri, Rajasekhar Reddy Puchakayala, and Raghavender Rao each paid fines of Rs 5 lakh and Rs 6 lakh to SS Organics Ltd., which the SEBI imposed.

This incident highlights the importance of adhering to regulatory norms and obtaining proper transaction approval. Failure to do so can result in hefty fines and damage to the reputation of the company and its directors. It also emphasizes transparency in related party transactions and the importance of avoiding conflicts of interest. Companies should ensure that they comply with all applicable regulations and seek proper approvals to avoid facing similar penalties in the future.

SEBI’s Preventive Actions to Curb Market Violations

SEBI’s actions against these entities are a part of its efforts to prevent fraudulent trading and market manipulations. They have taken several preventive actions to maintain a solid and regulated Indian market.

SEBI has implemented strict regulations against wash trading, including rules prohibiting market manipulation, fraudulent and unfair trade practices, and insider trading. The regulator has also established a comprehensive surveillance system that monitors trading activities to detect and deter wash trading.

Furthermore, SEBI has mandated that brokers and trading members maintain proper documentation and records of their trading activities to ensure compliance with the regulations. It also encouraged market participants to promptly report any suspicious activities.

The regulator takes active actions to implement the Listing Obligations and Disclosure Requirements regulations, which ensure that companies listed on the Indian stock exchanges comply with specific standards of corporate governance, financial reporting, and disclosure.

SEBI has also been enhancing transparency and investor protection in the Indian market. They have implemented several measures to increase the flow of information to investors, including the requirement for companies to disclose material events and related-party transactions. SEBI has also implemented regulations to prevent insider trading and other market manipulations.

Final Words

SEBI’s recent actions against entities violating market regulations strongly indicate that the watchdog will not tolerate companies and individuals flouting regulatory norms. By imposing fines on the violators, SEBI has taken a step towards ensuring a level playing field for all participants in the capital market, promoting investor protection, and maintaining the integrity of the securities market.


What is the penalty for violating SEBI’s regulations?

The penalty for violating SEBI’s regulations can range from a warning or a monetary fine to suspension of trading privileges or even criminal charges. The exact sentence depends on the nature and severity of the violation.

What can investors do to ensure compliance with SEBI’s regulations?

Investors can ensure compliance with SEBI’s regulations by staying informed about the latest rules and guidelines, conducting due diligence before investing in any security, and reporting suspicious activity to it or other relevant authorities. Investors can also consult with financial advisors or seek guidance to ensure compliance with its regulations.

What is the penalty for violating SEBI’s regulations?

The penalty for violating SEBI’s regulations can range from a warning or a monetary fine to suspension of trading privileges or even criminal charges. The exact penalty depends on the nature and severity of the violation.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

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