SEBI order in the case of circular trading and creation of artificial volume

Background

  1. The Securities and Exchange Board of India (hereinafter referred to as ˜SEBI™) conducted investigations into the alleged irregularity in the trading in the shares of Rich Universe Network Limited (hereinafter referred to as the Noticee No. 1) which was formerly known as Rich Capital & Financial Services Ltd., for the period from February 01, 2010 to September 24, 2010 (hereinafter referred to as the Investigation Period). Shri Shashwat Agarwal is the Chairman and Managing Director and Shri Rajeev Agarwal, Shri Sannjay Gupta, Shri Dhrupesh Shah and Late Shri K. K. Agarwal are Directors of the Noticee No. 1 (hereinafter referred to as Noticee Nos. 2-6 respectively).
  2. The investigation revealed that the shares of the Noticee No.1 opened at Rs 56.75 on February 01, 2010 and reached a high of Rs 119.90 on September 02, 2010 and closed at Rs 111.80 on September 24, 2010. A group of entities has indulged into circular trading, created artificial volume and influenced the price of the shares of the Noticee No. 1 during the investigation period. In order to further analyze the violations, if any, committed by the several entitles, the Investigating Authority of SEBI issued a Summon to Noticee No. 1 and 2 requiring them to provide certain information documents, which they failed to furnish and thereby hampered the investigations.

The full order is attached here for download.

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