SEBI muzzles Himachal-based LS Industries over stock manipulation

Market regulator SEBI has banned Himachal Pradesh-based LS Industries Ltd (LSIL) from accessing the capital market. This follows the company’s zero revenue, despite a market valuation of Rs 5,500 crore.

According to SEBI, the matter pertains to the company and its key associates which were involved in artificially inflating the company’s share price despite negligible revenue and financial instability.

Following allegations of fraudulent activities and stock price manipulation, the regulator has issued an interim order against LSIL and five associated entities.

SEBI also directed Jahangir Panikkaveettil Perumbarambathu (JPP), a Dubai-based NRI public shareholder, to impound unlawful gains of Rs 1.14 crore from the sale of shares as part of a prima facie fraudulent scheme.

In an interim order passed on Tuesday, SEBI noted that LSIL, a BSE-listed entity, and its promoter devised a scheme in which the former director of the company, Suet Meng Chay, transferred a 12.12 per cent stake of the company to JPP for just $1. This transaction made JPP richer by Rs 2,752 crore when LSIL’s market capitalisation peaked at Rs 22,700 crore. SEBI has impounded Rs 1.14 crore in illegal gains from JPP and barred all six entities from the market.