Tax Evasion Through Stocks: SEBI Revokes Ban On 114 Entities
A worker cleans the glass of the Securities & Exchange Board of India in Mumbai (Photographer: Adeel Halim/Bloomberg)

Tax Evasion Through Stocks: SEBI Revokes Ban On 114 Entities


The Securities and Exchange Board of India has revoked trading ban imposed on 114 entities, which had come under the scanner for alleged manipulation and misuse of stock markets for tax evasion, saying it did not find any adverse evidence against them.

This comes after SEBI had revoked ban on a total of 307 entities earlier this month, in the First Financial case as well as in the matter of dealing in shares of Eco Friendly Food Processing Park, Esteem Bio Organic Food Processing, Channel Nine Entertainment and HPC Biosciences.

These entities were also under the SEBI’s scanner for alleged misuse of stock market platform for tax evasion and suspected money-laundering activities.

In the present case, SEBI, in May 2015, had restrained Pine Animation and 177 related entities from the securities market for alleged tax evasion worth Rs 420 crore. Later, the regulator had lifted trading restriction against two of them.

The directions against the remaining 176 entities were confirmed through separate orders in June 2016, July 2016, August 2016, and June 2017.

Following the interim orders, SEBI conducted a detailed investigation of the entire scheme employed in the instant matter, connection amongst the debarred entities, funds used for the price manipulation of the scrip of Pine Animation so as to ascertain the violation of securities laws.

After completion of the investigation, the regulator said it “did not find any adverse evidence against them (114 entities) to show any connection/nexus with PAL or its promoters/directors or promoter related entities or any role in price manipulation volume manipulation in the scrip of Pine Animation”.

Hence, violation of provisions of SEBI Act, Securities Contracts regulation, Prohibition of Fraudulent Trade (PFTUP) norms were not observed in respect of these 114 entities.

Accordingly, in an order dated September 19, SEBI has revoked the confirmatory orders against a total of 114 entities with immediate effect.

However, the regulator said that directions issued against the remaining 62 entities would continue.

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