Why SEBI has conducted search and seizure operations across India
What's the story
The Securities and Exchange Board of India (SEBI) has conducted extensive search and seizure operations in connection with a suspected stock manipulation network. The action was taken across several cities, including Mumbai, Bhuj, Surat, Bengaluru, and Hyderabad. The probe is centered on an alleged "pump-and-dump" activity where stock prices are artificially inflated via coordinated trades and corporate actions before being sold off at higher levels.
Probe
Investigation focused on specific entities involved in manipulation
The investigation primarily focuses on a small investment banking firm and a drip irrigation company. SEBI's teams are analyzing fund flows, trading data, and communication records to establish links between entities and individuals involved in the alleged manipulation network. One big red flag raised by the regulator is a suspected fraudulent bonus issue, despite negligible revenue or profit growth.
Evidence collected
Searches lasted 3 days
The searches conducted by SEBI lasted three days. They resulted in the seizure of documents and digital evidence that may help establish the alleged manipulation network. The regulator is likely to take further action once findings from this ongoing investigation are finalized.
Company responses
Searches conducted at premises of RM Drip and R&B Denims
In an exchange filing, RM Drip and Sprinklers System Ltd confirmed that searches were conducted at the premises of its promoter-directors. The firm said there was no material impact on its business or financials due to these actions. Separately, R&B Denims Ltd also confirmed similar search operations but said the reasons for these actions have not been disclosed by the investigation authority.