The Securities and Exchange Board of India has found hundreds of entities to have devised such unauthorised schemes to launder black money and evade taxes and is currently probing many other such cases.
To check laundering of black money through stock market platform, regulator has enhanced its vigil for the entities engaged in such illicit trades and has suggested further probe by other agencies in this regard.
The Securities and Exchange Board of India (Sebi) has found hundreds of entities to have devised such unauthorised schemes to launder black money and evade taxes and is currently probing many other such cases..
Sebi said the typical modus operandi of allotting shares on a preferential basis, announcing a stock split and then bringing in connected entities to provide exit was a scheme devised to make ill-gotten gains.
It included pumping the share price artificially and then dumping the price so that the same cycle could be repeated.
Also the mechanism is presumably being used to deceive the authorities by laundering black money and making tax-free profits. Further, the order mentions that the issue requires further investigation from the forensic angle, .
