SEBI v. Vishnubhai Sunderlal Parekh and Rajendra Chandulal Shah (Gujarat Arth, Right Finstock directors, 2022)

Judgment entered

✓ Checked against the primary document on October 9, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In March 2022 a SEBI adjudicating officer imposed penalties totalling Rs 85 lakh on Vishnubhai Parekh, a director of the dissolved broker-linked company Right Finstock, for its part in helping a promoter group manipulate Gujarat Arth shares in 2003-04. Proceedings against the other director, Rajendra Shah, were disposed of.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

—

Alleged gain

—

Penalty as published

8.5m INR

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars. This regulator states penalties in INR. The figure is recorded as published and is not converted, so it does not appear in the USD totals or medians used elsewhere on this site.

What is alleged to have happened

This adjudication order of 31 March 2022 followed a remand. In 2015 an adjudicating officer penalised Right Finstock Private Limited Rs 85 lakh over trading in the shares of Gujarat Arth Limited between October 2003 and January 2004. The Securities Appellate Tribunal set that order aside in October 2017 and sent the case back, and the company was meanwhile struck off the register and dissolved, so SEBI started fresh proceedings against its two directors, Rajendra Chandulal Shah and Vishnubhai Sunderlal Parekh.

SEBI's case is that Right Finstock received 9,86,400 shares, about 18.96 percent of Gujarat Arth, off the market from the promoters and persons acting in concert on 24 October 2003, and then sold them on the market, so creating artificial volumes and aiding the promoters' manipulation. It was also said to have crossed 15 percent without a public offer and to have missed the takeover and insider trading disclosures.

The officer disposed of the proceedings against Mr Shah after accepting his submission that he had disassociated himself from the company, on the basis that no material contradicted it. For Mr Parekh, the officer held that as director he was liable for the violations of the dissolved company and imposed Rs 20 lakh under section 15HA for the manipulation, Rs 30 lakh under section 15H for the failure to make a public announcement, and Rs 35 lakh under section 15A(b) for disclosure failures, Rs 85 lakh in all, payable in 45 days.

The officer noted that the investigation did not quantify gains or investor losses, but reasoned that the practice itself yielded gains. The record does not show what became of the promoters and other persons in the wider matter, whether Mr Parekh appealed, or any criminal case.

This library tags the matter as price manipulation, because the finding is that shares were passed from the promoter group off the market and sold into it to create artificial volume. The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Price manipulation — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2022-03-31 SEBI adjudication order

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEBI order

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.