SEBI Upholds Order Against 12 for Manipulating V Marc India's Market

The Securities and Exchange Board of India (Sebi) on Friday upheld its previous order with some changes against 12 entities, including the promoter of V Marc India Ltd, for engaging in a fraudulent scheme to manipulate the company's share volumes and prices. Sebi's whole-time member Ananth Narayan G stated, "I hereby confirm the directions of the interim order dated February 28, 2024, subject to the following modification - the total liability for the alleged illegal gains to be impounded stands modified to Rs 6.30 crore as Jai Kishorr Singhal has deposited the alleged illegal gains made by him."

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Investigation and Findings

The watchdog noted that observations made in the current order are tentative and pending further investigation. The probe will proceed without being influenced by any directions or observations from either the interim or present orders. Based on the investigation's outcome, appropriate proceedings may be initiated according to the law.

In February, Sebi had issued an interim order barring 12 entities, including V Marc India's promoter, from the securities market for manipulating share volumes and prices. The regulator also impounded wrongful gains of Rs 6.38 crore made by some entities from this scheme.

Entities Involved

The case involves fraudulent trading in V Marc India Ltd's shares, listed on NSE’s SME segment. The scheme was allegedly orchestrated by the promoter and company management along with connected parties. Sebi found that V Marc's promoter and Managing Director Vikas Garg and former Whole Time Director Sandeep Kumar Srivastava engaged Prijesh Kurani to operate the market.

Kurani used his own and connected entities' trading accounts and those linked to Garg to manipulate the scrip. Funds were channelled through connected entities to Kurani for executing this fraudulent scheme. The scheme began as soon as the scrip was listed on April 8, 2021.

Evidence Collection

Sebi's examination covered April 9-30, 2021, aided by data from Kurani's mobile device seized during a search operation at his residence in May 2022. This data included WhatsApp messages involving entities mentioned in this order and a signed agreement between certain entities, serving as crucial evidence.

Garg challenged Sebi's interim order in the Securities Appellate Tribunal. The tribunal directed Sebi to pass a fresh order within four weeks on May 8. Later, an order dated July 15 granted additional time until July 30 for passing the order.

Sebi confirmed that submissions from the entities were insufficient to refute prima facie conclusions drawn against them in the interim order. Consequently, findings that these entities engaged in a fraudulent scheme to manipulate V Marc India's share price and volumes stand confirmed.