Strict action on LS Industries and Promoters – Sebis Striat Action on Ls Industries and Promoters

The Securities and Exchange Board of India (SEBI) on Tuesday banned LS Industries, Promoter Profood Finance and four others from the securities market for alleged manipulations and frauds in share prices. The regulator found that the textile company had recorded negligible revenue in the last three financial years, but its market capitalization at the summit was Rs 22,700 crore. Currently, the company’s market cap is Rs 5,768 crore.

Investigation revealed that in October 2022, a former director of the company, Suit Meng Che, transferred his entire 12.12 per cent stake in the company out of the market to Dubai’s NRI Jahangir PP. The price of shares transferred to the off-market was around Rs 154 crore at Rs 15 per share. But the entire stake was sold for only 75 rupees or 1 dollar. SEBI’s findings showed that suspicious procurement orders were given by many institutions at 9 am on the upper circuit border, increasing the share price. Such trend increased the price 11 times within a short period of two months.

In September, when the share price was at the peak of Rs 267.5, Jahangir sold some shares. The trading pattern showed that they sold most of their shares only during the time the prices increased. After the bounce, the stock started touching the lower circuit daily due to selling on the lower circuits by the same institutions.

Out of the 10.28 crore shares received by Jahangir, he sold 1.06 lakh shares and earned a profit of Rs 1.14 crore. SEBI has directed to seize this illegal benefit and ban Jahangir from the market.

First Published – February 11, 2025 | 9:54 pm IST