SEBI v. Divyaben Hiteshbhai Gangani and others (Kapil Raj Finance Ltd, circular trades, 2023)

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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In June 2023 a SEBI adjudicating officer found that 15 connected individuals traded in circles in Kapil Raj Finance shares on BSE in early 2018 without any change of ownership. Each was fined between Rs 5 lakh and Rs 8 lakh, Rs 87 lakh in total.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

—

Total relief

—

Alleged gain

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Penalty as published

8.7m 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 was issued on 16 June 2023 by G. Ramar, a SEBI adjudicating officer. It concerns trading in Kapil Raj Finance Ltd, listed on BSE, from 24 January to 20 April 2018. The record names twelve of the 15 noticees, led by Divyaben Hiteshbhai Gangani; three further noticees are covered by the same order.

SEBI's investigation identified 30 suspected entities, 15 of whom were found to be connected to one another. It alleged that they entered into circular trades among themselves with no intention of changing ownership, creating a misleading appearance of trading in the stock, in breach of section 12A of the SEBI Act and the PFUTP Regulations 3(a) to (d), 4(1) and 4(2)(a) and (g). A show cause notice followed in April 2023.

The order finds the allegations established and describes the circular trades without change of ownership as a fraud on investors and shareholders that is detrimental to the functioning of the market. It does not quantify any gain or investor loss.

Penalties under section 15HA of the SEBI Act were Rs 8 lakh each for Ms Gangani and Pardhi Dhirubhai Khanabhai, Rs 7 lakh each for Bhavin Natwarlal Panchal, Deepak Parsharam Salvi and Ravikumar Vinodbhai Parmar, and Rs 5 lakh each for the other ten. The total is Rs 87 lakh. No market bar or disgorgement was ordered.

The order is an administrative penalty, not a criminal judgment, and the record shows no criminal case. It does not show whether any noticee appealed or paid, or the volume or value of the circular trades.

This library tags the matter as wash trading and matched orders (circular trades). 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 2 techniques 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.

• Wash trading — see how it works, what statute it engages, and every other action tagged the same way.
• Matched orders — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2023-06-16 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
• Order (PDF)

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.