The Securities and Exchange Board of India (SEBI) has taken action against LS Industries Ltd. and related entities for alleged stock price manipulation. The regulator began its investigation after a report highlighted the company’s dubious valuation of Rs 5,500 crore despite negligible revenue.
SEBI’s probe uncovered suspicious trading patterns, misleading disclosures, and a questionable transfer of shares to a Dubai-based Non-Resident Indian (NRI) investor named Jahangir Panikkaveettil Perumbarambathu. Former director Suet Meng Chay transferred the shares, worth at least Rs 154.32 crore, for just $1. LS Industries’ stock price experienced unusual fluctuations, rising by 1,089% from Rs 22.50 to Rs 267.50 within two months before plummeting to Rs 42.39 and then rebounding to Rs 136.87.
Sebi’s investigation into stock manipulation
During this period, the company made several grand announcements, such as venturing into artificial intelligence and robotics, hiring foreign directors, establishing a Dubai subsidiary, and acquiring Robochef India Pvt. SEBI identified a group of traders, including Multiplier Share & Stock Advisors, Setu Securities, Paresh Dhirajlal Shah, and Ruchira Goyal, as key manipulators who placed large buy orders to inflate the stock price and then dumped shares, causing the price to crash.
The regulator has barred LS Industries, its promoter Profound Finance, and four other entities from the securities market. It has also impounded Rs 1.14 crore as unlawful gains and ordered the freezing of Jahangir’s bank accounts. SEBI Whole Time Member Ashwani Bhatia emphasized the need for a prompt investigation to be concluded by May 15, 2025.
He cautioned investors against irrationally pursuing outlandish gains without considering a company’s fundamentals. The investigation is ongoing, with SEBI aiming to uncover the full extent and implications of these unusual activities and ensure a fair trading environment for investors.
