Sebi bars 260 operators from market over fraudulent transactions
20 Dec 2014
The Securities & Exchange Board of India, in what may be its biggest-ever crackdown on suspected tax evasion and laundering of 'black' money through stock trading platforms, on Friday barred as many as 260 entities, including individuals and companies, from the securities markets.
While 152 entities have been barred in just one case relating to an entity named First Financial Services Ltd, another 108 entities have faced action in a case related to Radford Global Ltd.
While Sebi would itself further probe these cases, it has also decided to refer the matter to the Income Tax Department, the Enforcement Directorate, and the Financial Intelligence Unit, among other agencies, for necessary actions on their part.
Through two separate interim orders, Sebi said that these 260 entities would be restrained from accessing the securities market and from buying, selling or dealing in securities, either directly or indirectly, with immediate effect till further directions.
It has also asked stock exchanges and depositories to ensure that all its directions are strictly enforced.
The action comes at a time when the government has sharpened its focus on unearthing black money stashed abroad and within the country, while Sebi also recently tightened its surveillance of shell companies.
In the first case, the suspected dealings took place on the stock market for almost two years till 31 March 2014, while the second case relates to a period of little more than a year starting January 2013.
In its orders, Sebi said that the modus operandi of the barred entities typically involved stock market dealings aimed at evading long-term capital gains tax and showing the source of income as legitimate from stock markets.
''The schemes, plan, device and artifice employed in this case, apart from being a possible case of money laundering or tax evasion, is prima facie also a fraud in the securities market in as much as it involves manipulative transactions in securities and misuse of the securities market,'' the regulator said.