SEBI v. Global Securities Limited and others (sham preferential allotment and price rigging, 2022)

Judgment entered

✓ Checked against the primary document on October 8, 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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On 31 May 2022 a SEBI adjudicating officer penalised Global Securities Limited and eleven individuals a combined Rs 36 lakh for a preferential share allotment and trading pattern the order treats as a vehicle for a long-term capital gains scam. Eight other noticees, mostly directors, were cleared.

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

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Penalty as published

3.6m 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

A SEBI adjudicating officer, Prasanta Mahapatra, decided the matter on 31 May 2022. There were 20 noticees: the company itself, Global Securities Ltd, several directors and managers, and a group SEBI called operators and connected entities. The investigation period ran from March 2012 to April 2014, when the share price opened at Rs 11, reached Rs 156.50 in March 2013 and fell back to a low of Rs 3.66 in January 2014.

SEBI alleged breach of Regulations 3 and 4 of the 2003 fraudulent and unfair trade practices regulations. The order finds that the company's preferential allotment was not meant to raise capital for a business purpose but was a sham used with operators and connected entities in a long-term capital gains scheme, followed by trading that moved the price. It notes that around 74 per cent of shares net sold on the market in the period came from the preferential allottees' shares, and that the connected entities together accounted for about half of the market's positive price movement in the price-rise patch.

The officer held that the company had used the allotment as a device to defraud investors, that three noticees who operated others' trading and demat accounts had engaged in a fraudulent practice, and that eight further noticees had manipulated the price. The charges against eight noticees, including directors who were not in office when the allotment was made and one noticee not shown to belong to the group, were held not established.

The penalties under section 15HA were Rs 10 lakh on the company, Rs 5 lakh each on Arvind Goyal Babulal and Devesh Upadhyay, Rs 1 lakh each on Pankaj Jayantilal Dave and Dharmendra Harilal Bhojak and Rs 2 lakh each on the other seven individuals named in this record, a total of Rs 36 lakh. The order also notes a whole-time member order of September 2020 that had barred the company and one individual for a year, and others for six or three months.

The record does not show the profits made, whether the penalties were appealed, or how the allottees were treated.

This library tags the matter as price manipulation. 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. 2022-05-31 SEBI 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.