Mumbai, May 28: The Securities and Exchange Board of India (Sebi) has barred promoters of the Adani group from accessing the equity markets and dealing in securities for two years.

The market regulator has found that the promoters aided and abetted Ketan Parekh (KP) entities in manipulating the share price of Adani Exports Ltd, now known as Adani Enterprises.

According to Sebi, there was excessive volatility in the Adani Exports scrip from October 1999 to March 2001. On the BSE, the share price of Adani moved up sharply from the opening price of Rs 495 on November 1, 1999 to reach Rs 1,300 in December 1999. Then it started falling and touched Rs 570 in May 2000. The price again reached Rs 1,111 in July 2000. It then touched a low of Rs 209 in March 2001.

“It was found in the investigation that entities associated with KP entities had indulged in certain manipulative activities such as synchronised trading/ circular trading and creation of artificial volume to influence the price in the scrip of Adani. Investigations further revealed that there was movement of shares as well as funds between the Adani group and KP entities,” Sebi said.

It added that such funds and shares were used by KP entities to manipulate the securities market and make payment at the time of settlements on the stock exchanges. It was also found that the promoters traded in the scrip of Adani during the relevant period. Sebi said there was a close association between KP entities and the Adani group.

The Adani group companies involved in transactions with KP entities included Adani Agro Pvt Ltd, Adani Impex Pvt Ltd, Shahi Property Developers Pvt Ltd, Adani Properties Pvt Ltd, Advance Exports and nine others. The KP entities involved in the transactions were Triumph International Finance India Ltd, Panther Fincap & Management Services Ltd, Classic Credit Ltd, Panther Investrade Ltd and seven others.

An order issued by T.C. Nair, whole time member of Sebi, said while a showcause notice was issued to seven Adani promoter entities in January last year, the group submitted that they did not aid or abet KP entities in market manipulation of the Adani scrip. The group also said they sold shares of Adani to fund the port development project at Mundra in Gujarat and that there was no nexus between the group and KP entities.

However, Sebi said in view of the “enormity” of market manipulation by Parekh and his related entities in various scrips, including Adani, the Adani group, which had direct dealings with KP entities, cannot escape its responsibility on the plea that it was not aware of Parekh's manipulative intentions in the market. Sebi feels that Parekh and his related entities could not have manipulated the market to such huge proportions alone.