The Securities and Exchange Board of India (SEBI) has levied penalties totalling ₹2.8 crore on 18 entities for allegedly manipulating the share prices of Retro Green Revolution Ltd (RGRL).
The regulator has directed Sanjay Arunkumar Choksi and Western Agrotech Innovative to disgorge unlawful gains of ₹2.94 crore along with 12 per cent interest from December 31, 2021, till the date of payment. The amount is to be deposited in SEBI’s Investor Protection and Education Fund within 45 days.
It has also barred the 18 entities from the securities market for up to five years. The investigation found that the entities were part of a premeditated scheme to artificially increase the price of the illiquid scrip of RGRL and lure investors.
The scheme involved trading among connected entities to create artificial volumes in a thin stock, followed by circulating tips/stock recommendations through a Telegram channel.
The entities had indulged in creating a misleading appearance of trading in the scrip and manipulated the price.
“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.
The entities allowed certain entities to offload illiquid shares of RGRL to general public investors, thereby earning unlawful gains of a little over ₹2.94 crore. Each entity has been fined in the range of ₹5-50 lakh.
The investigation was conducted for the period from September 1, 2020 till December 31, 2021 to ascertain whether there were violations of the provisions of SEBI’s PFUTP (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) rules.
Thereafter, SEBI issued a show cause notice on November 8, 2024, against the noticees for the alleged violations.