Sebi announces market ban on LS Industries and others over alleged stock manipulation, fraud; probe extended till Nov 15
India's market regulator, the Securities and Exchange Board of India (Sebi) on Friday confirmed the suspension of LS Industries, its promoter, and four other individuals from participating in the securities markets until the results of an investigation into allegations of fraudulent practices and stock price manipulation.
The promoter of LS Industries Profound Finance, Jahangir Panikkaveettil Perumbarambathu, and Suresh Goyal, Alka Sahni, and Shashi Kant Sahni HUF, a Dubai-based NRI public shareholder of LS Industries, have also been prohibited from the markets.
The timeline to complete the probe regarding this matter has been extended to November 15, and these entities are directed to cooperate for the same, Sebi said.
In February 2025, the market regulator passed an interim order barring LS Industries, Profound Finance and four others from the securities markets over allegations of fraudulent activities and stock price manipulation.
Sebi had also instructed Perumbarambathu to impound unlawful gains of ₹ 1.14 crore from the sale of shares as part of the fraudulent scheme.
The matter concerns LS Industries and its key associates, who were involved in artificially inflating the company's share price despite negligible revenue and financial instability.
Sebi, in its interim order, noted that LS Industries reported negligible revenue in the last three financial years (FY22-FY24) and the first three quarters of FY25, indicating that the company had not conducted any business during this period.
The share price of LSIL rose more than 10 times from ₹ 22.50 to a high of ₹ 267.50 between July 23, 2024 and September 27, 2024, with the company reaching a peak market capitalisation of about ₹ 22,700 crore despite poor financial performance.
The sudden price movement in the shares without any substantial changes in fundamentals, the transfer of shares to Perumbarambathu, and the suspicious trading patterns have come under scrutiny.
'In view of the sudden price movement in the scrip without any meaningful change in fundamentals, the dubious transfer of shares to JPP and the suspicious trading patterns of certain entities, it prima facie appeared that the Noticees were part of a manipulative scheme designed to defraud investors,' Sebi said.
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