Mumbai: Clamping down on a suspected case of tax evasion through stock market platform, regulator Sebi and leading bourse BSE have busted a Pakistan-based entity that was being used to lure investors through fraudulent SMSes.
While Sebi has barred Dhanya Finstock, a listed company, and 75 others from the securities markets till further orders, it has decided to conduct a detailed investigation into the matter besides referring it to other law enforcement agencies such as Income Tax Department, Enforcement Directorate and Financial Intelligence Unit for necessary action at their end.
Besides, a complaint has been filed with the Cyber Crime Investigation Cell of Mumbai Police by the top stock exchange BSE for "fraudulent misuse of the term BSE" by a website named 'bsebull.in' that has been shown as registered in Pakistan.
Sebi has also written to the Cell seeking information about this website, as also another one stocktips.in. "Findings of BSE show that the website www.bsebull.in was created only recently and same was shown to have been registered in Pakistan. Since the name of BSE was used by BSEBull, BSE filed a complaint with the Cyber Crime Investigation Cell, Mumbai for fraudulent misuse of the term BSE.
"In this case, prima facie, a fraud was perpetrated by use of identity of a Sebi registered investment advisor, which shows the vicious intent behind the act," Sebi said.
The probe by Sebi and BSE began after the stock exchange received complaints from several investors in July last year that they have entered into buy trades in Dhyana on July 27, 2015 based on the stock tips received through SMS.
A large numbers of buy orders were placed, based on messages appearing on BSEbull.in and spam messages on another website, stockAxis.com. To BSE, the case appeared as that of misuse of stock exchange system to generate fictitious Long Term Capital Gains (LTCG) where buyers were also lured to buy in the scrip to give exit to few shareholders or preferential allottees.
As a pre-emptive measure, pending investigation and in the interest of the investors, BSE proposed to withhold the pay-out in the shares for trading carried out between July 27-29, 2015. Dhyana shares rose by a whopping 43 per cent -- from June 13, 2014 (first date of trading) to July 27, 2015, despite it having no prior trading history.
After an "abnormal and unprecedented rise in volume on July 27, 2015", the stock saw a steep fall in the price the very next day touching the lower price band, trapping the investors who bought on the previous day. Background of the company, including no trading history at Ahmedabad Stock Exchange, weak financials and suspicious price-volume pattern post listing at BSE, added to the concerns.
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