Mumbai, Feb 11 The Securities and Exchange Board of India (SEBI) on Tuesday took strict action against LS Industries Limited, its promoter Profound Finance, and four other entities, barring them from the securities market for manipulating stock prices.
The probe uncovered suspicious trading patterns, misleading disclosures, and questionable financial transactions, including money transfers to a non-resident Indian (NRI).
During the investigation, the regulator observed wild fluctuations in the company's share price.
Between July 23, 2024, and September 2024, the stock price witnessed a staggering 1,089 per cent increase from Rs 22.5 to Rs 267.5 apiece.
However, by November 2024, the price had crashed to Rs 42.39. In December 2024, it rebounded to Rs 136.87, only to settle at Rs 67.95 in February 2025.
SEBI identified a group of traders behind this manipulation, including Multiplier Share & Stock Advisors, Setu Securities, Paresh Dhirajlal Shah, and Ruchira Goyal.
These traders allegedly placed large buy orders to artificially inflate prices and later dumped shares, causing the stock to hit lower circuits and crash in value.
The investigation also found that LS Industries made several misleading announcements to lure investors.
These included plans to enter artificial intelligence (AI) and robotics, hiring foreign directors, launching a Dubai subsidiary, and acquiring Robochef India Private Limited.
SEBI discovered that directors of Robochef were actively trading in LS Industries’ shares when the stock price was at its peak.
In its detailed order, SEBI Whole Time Member Ashwani Bhatia stated that the investigation must be completed by May 15, 2025.
"At the same time, I deem it fit to sound a note of caution for the investors. It is noted that the investors at times act in a manner bereft of any caution or rationale," Bhatia said in the order.
He further added that the investors in blind pursuit of profit through investment in a company without any fundamentals are like children following the proverbial pied-piper of Hamelin.
“Markets can be generous at times, but cannot be so generous to give outlandish gains," Bhatia mentioned.
Additionally, the regulator impounded Rs 1.14 crore as unlawful gains from the manipulative activities.
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