Sebi Imposes Rs 15 Lakh Fine on Gujarat CM Vijay Rupani's Family for Manipulative Trading
The alleged manipulative transactions by Vijay Rupani HUF were carried out between January 2011 and June 2011. Rupani took charge as the CM of Gujarat in August 2016.
File photo of Gujarat chief minister Vijay Rupani. (Getty Images)
New Delhi: Market regulator Securities and Exchange Board of India (Sebi) charged 22 entities, including Gujarat Chief Minister Vijay Rupani’s Hindu Undivided Family (HUF), for “manipulative trades” in Sarang Chemicals, a company not known to many. Rupani’s HUF has been fined Rs 15 lakh.
The alleged manipulative transactions were carried out between January 2011 and June 2011. Rupani took charge as the CM of Gujarat in August 2016.
A Hindu Undivided Family is a firm wherein a family can come together to run a business. In simpler words, it is similar to a partnership firm and gets various tax benefits as per rules.
In May 2016, Sebi had issued a common show cause notice to the 22 entities alleging violations under Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) relating to the securities market.
“It is observed that noticee numbers 1-9, 18 & 20 by trading voluminously amongst themselves had first generated interest among the other investors to trade in the scrip and when the other investors started trading in the scrip due to such false impression of market, some of the group entities (noticee numbers 1-5 and 10-17) had offloaded shares in the market at an increased price... Such pattern of trading clearly reveals the ulterior/malafide intent and certainly such activities of noticee numbers 1-18 & 20 is in violation of regulation 3 (a) to (d), 4 (1) & 4 (2) (a), (b) & (e) of the PFUTP Regulations,” the Sebi order says.
The market regulator also said that Rupani didn’t reply to the show cause notice (SCN) issued by it.
“The noticee (Rupani HUF) contended that the CD (compact disk) attached to SCN is damaged and it is unable to open the same. Considering the request of the noticee, another CD was sent to him vide communique, dated May 25, 2016, and informed the noticee number 18 that in case it is still unable to open the CD then, its duly authorised person may collect the same from office of undersigned with prior intimation. It was also stated in said communique to provide its e-mail ID. Vide letter dated June 13, 2016, the noticee requested for keeping in abeyance the proceedings till Mr Vijay Rupani recovers. As per medical certificates attached with said letter suggested for rest of eight weeks to Vijay Rupani from May 18, 2016, however, no reply towards the SCN has been received from it/him till date,” Sebi said in the order.
Sebi said it passed an ex-parte order as the noticees, including Rupani HUF, failed to submit their reply to the SCN within the sufficient time provided.
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