Sebi imposes Rs 4 crore fine for manipulating share prices

The Securities and Exchange Board of India (Sebi) announced on Wednesday that it has imposed fines totaling Rs 3.87 crore on 11 individuals for manipulating the share price of Darshan Orna Ltd (DOL) using social media platforms. According to Sebi’s order, the penalties must be paid within 45 days.

Sebi’s investigation revealed a sophisticated market manipulation scheme involving three tiers of operation in the DOL stock from September 2021 to June 2022. In the first tier, Aakash Doshi, identified as Noticee 1, along with his father Dilip Doshi, accumulated shares of the company, while Kevin Kapadia traded in his wife’s account to provide essential funding to other participants.

The second tier of the operation involved Satyen Dalal, who provided funding of Rs 46 lakh to the Doshi family during the acquisition phase of shares and received back 90 percent of these funds during the selling phase, indicating the temporary nature of the scheme.

In the third tier, Dhanpal Gandhi facilitated the coordination of messages through the Telegram platform, working closely with Amesh Jaiswal and Jalaj Agarwal, who posted recommendations on the Telegram platform TBO. The trading activities, coupled with messages on the Telegram app, created an illusion of increased price and volume in the market, which attracted unsuspecting investors to purchase DOL shares. This was evident from the significant increase in public shareholders from 1,732 to 7,536 during the period from January 2022 to March 2022, a 335 percent surge. The share price also rose from Rs 77 to Rs 146.7 during this time, allowing some individuals to profit Rs 2.51 crore collectively as they systematically exited their positions.

By engaging in these deceptive trades, the individuals violated the PFUTP norms, leading Sebi to impose fines totaling Rs 3.87 crore on them. The penalties imposed range from Rs 10 lakh to 1.2 crore.

Sebi’s order followed an investigation into the trading activities of certain entities in the DOL stock based on recommendations circulated on the Telegram channel to determine potential violations of PFUTP norms. The investigation period covered from September 2021 to June 2022.