Penalty on Rupani HUF set aside; Sebi to pass fresh order

The Securities Appellate Tribunal (SAT) on Wednesday set aside Sebi’s order against 22 entities including Gujarat Chief Minister Vijay Ramniklal Rupani’s HUF( Hindu undivided family),as the order was passed by the regulator without giving them an opportunity to file their response.

Sebi on October 27, through an adjudication order imposed Rs 6.9 crore penalty on all the entities including Rupani’s HUF for allegedly manipulating the stock price of Ahmedabad based Sarang Chemical between January and June 2011.

Vijay Rupani took charge as the Chief Minister of Gujarat in August 2016.

The Tribunal has directed Sebi to pass fresh order after giving an opportunity of hearing to all the parties.

All the parties have been asked to file their responses to Sebi within three weeks.

The regulator had alleged that Rupani’s HUF and others had created artificial volume in the shares of Sarang Chemicals by trading among themselves. Sebi said they created misleading appearance of market and thus got unfair gain.

The regulator imposed a penalty of Rs 15 lakh on Rupani’s HUF.

“In 2011, the share broker of Vijay Rupani HUF had carried out only one transaction which is a minuscule part of the total transactions done by several unconnected entities,” Vijay Rupani tweeted on Thursday.

Sebi’s adjudication officer Rachna Anand in her 31-page order said on May 6, 2016, show cause notices were sent to all 22 entities, including Rupani (HUF), and after an initial exchange of communication between Rupani and the regulator, including a request for keeping in abeyance the proceedings for eight weeks due to medical reasons, there was no subsequent reply to the notice from the him.