Market regulator Sebi today barred nine entities from dealing in the securities market for their alleged manipulative trade practices in the shares of edible oil producer Ruchi Soya Industries.
The banned entities are Aventis Biofeeds, Navinya Multitrade, Shreyans Credit and Capital, Betul Minerals and Constructions, Betul Oil & Feeds, Sunmate Trade, Uni24 Techno Solutions, Vision Millennium Exports, and Moebius Credit and Capital.
In an interim order, Securities and Exchange Board of India (Sebi) said these entities are "restrained from accessing the securities market and further prohibited from buying, selling or dealing in securities in any manner whatsoever, till further directions".
The order is based on the preliminary findings by Sebi. Sebi had received alerts regarding 'marking the close' in the scrip of Ruchi Soya for September 27, 2012.
'Marking the close' refers to the act of artificially impacting the closing price in cash market, which acts as the settlement price in derivative market.
Citing prima facie evidence, Sebi said these connected entities "indulged in 'marking the close' by moving the closing price of the scrip of Ruchi Soya in the cash market in an artificial, manipulative and unfair manner and thereby made unlawful gain on the long positions held by them in futures of the scrip".
Based on alerts, the regulator had examined the trading pattern in the scrip of Ruchi Soya for September 27 and noticed a significant movement in the price of the shares during the last half an hour of trading.
The price of the shares had gone up 26 per cent during the last 10 minutes of the trading day. Further, the price and volume movement in the scrip was mainly concentrated during the last 3 minutes of the trading.
It was also noted that Ruchi Soya was removed from the derivative segment on September 27, last year, which was the expiry day of all derivative contracts under examination in the scrip of the company.
Sebi found the nine entities had heavily traded in the shares of the company at the NSE on the trading day. "These entities were collectively holding long position in futures, to the extent of 71.96 lakh shares of Ruchi Soya," Sebi said.