Regulator Sebi has barred Shri Balaji Investments and two others from capital markets for five years for carrying out illegal trading and settlement activities. The ban has been imposed on Balaji Investments, its proprietor Manaklal Panpaliya and Sanjay Rathi, who was controlling the affairs of the company. Sebi found that Balaji Investments was engaged in illegal activities such as trading in equity and derivative contracts outside the mandated platform of stock exchanges or the terminals allotted to it and the transactions were settled by cash. It had carried out “dabba trading” by misusing its status authorised person, the Securities and Exchange Board of India (Sebi) noted. Balaji Investments became a certified market representative of Angel Broking in June 2011. “Balaji Investments by misusing its status as authorised person engaged in illegal trading… hence, I am of the view that Balaji Investments, its proprietor Panpaliya and Rathi have violated the provisions of… the SCRA (Securities Contracts Regulation),” Sebi Whole Time Member S Raman said in an order dated July 20. Accordingly, Sebi has restrained Balaji Investments, Panpaliya and Rathi from dealing in the securities market or accessing the capital market for five years.
Besides, they have been restrained from associating with any intermediary registered with Sebi in any official capacity for five years. Sebi, through an interim order in August 2014, had prohibited Balaji Investments, Panpaliya and Rathi from the capital markets in any manner, directly or indirectly, until further orders.
In that order, Sebi had prima facie found that the entities had allegedly dealt in shares of Tata Power, BHEL, DLF, Punjab National Bank, Reliance Power, HCL Tech and HDFC, among others, outside the trading system of the exchanges. Besides, they had traded in derivative contracts in violations of securities market norms.