The Securities and Exchange Board of India (Sebi) has imposed penalties totalling Rs 2.8 crore on 18 entities and barred them from the securities market for up to five years for manipulating shares of Retro Green Revolution Ltd (RGRL).
The regulator has also asked 15 of these entities to disgorge unlawful gains worth Rs 2.94 crore, along with 12 per cent annual interest from December 31, 2021, till the date of payment.
The amount must be deposited in Sebi’s Investor Protection and Education Fund within 45 days.
In a 61-page order, Sebi said the entities were part of a pre-planned scheme to push up the price of an illiquid stock and attract retail investors. The method involved trades between connected entities to create artificial volumes, followed by stock tips circulated through a Telegram channel.
Six key noticees, including Sanjay Arunkumar Choksi, were found to have created a misleading appearance of trading and manipulated the price of the scrip. Sebi said the Choksi Group played a central role.
Although Choksi was no longer a promoter of RGRL, Sebi noted that the company continued to be controlled by him, with statutory payments being made from his account.
“I find that noticee no 1 (Choksi) did not act in good faith and exploited his influence in the company for personal gains.
"The rise in volume of shares in the otherwise illiquid scrip of RGRL and the telegram recommendation are indicators affecting the investment decision that sway the investors in trading in the scrip,” Sebi's Quasi-Judicial Authority Santosh Shukla said in the order.
Shukla added: “This case is fit to issue directions restraining the noticees (18 entities) from the securities market and imposing a monetary penalty on them to meet the ends of justice.”
Sebi said the entities helped certain noticees offload illiquid shares to public investors, earning unlawful gains of over Rs 2.94 crore. Penalties range between Rs 5 lakh and Rs 50 lakh.
The order follows an investigation into trading in RGRL between September 1, 2020, and December 31, 2021, including the role of stock tips circulated on Telegram. A show cause notice was issued on November 8, 2024, before the final order.