Regulations
Sanjay Dangi, another barred market manipulator, still pulling strings

The market regulator SEBI recently banned Sanjay Dangi for colluding with promoters of four companies to influence share prices; however, Intelligence Bureau reports suggest that his involvement stretches way beyond these four firms

Last week, the market watchdog, Securities and Exchange Board of India (SEBI) had issued an order against Sanjay Dangi, a Mumbai-based high net-worth individual, barring him from dealing in the equity markets. Initial investigations by the Income Tax Department and further findings of SEBI confirmed that Mr Dangi had colluded with promoters of four companies, namely, Murli Industries, Ackruti City, Welspun Corp and Brushman India, to artificially jack up these scrips through dummy companies connected to the promoters or Mr Dangi himself.

According to regular reports by the Intelligence Bureau (IB), which has been keeping tabs of Mr Dangi's market activity, he has been active in several other companies as well. These reports, available with Moneylife suggest that Mr Dangi, together with Viren Ahuja, a Mumbai-based business man "was planning to take the share price of Core Projects to around Rs350". After securing F&O trading rights from 25 June 2010, Mr Dangi, with a view to hiking up the share price had suggested that the promoters convert their holdings in cash into the F&O. The IB found that the share price of Core Projects had increased steadily from around Rs195 in the beginning of June 2010 to close to Rs250 by the end of the month. This raises questions about how stock exchanges select stocks for inclusion in the derivatives segment.

At the same time, the IB also found that "Dangi in conjunction with Anand Rathi, were working to hike up the share price of Ackruti City to Rs 700. In this connection,Dangi was willing to buy shares worth Rs 25 crore. Dangi and Rathi were also planning to operate the Gokul Refoils & Solvent counter by cornering around 40 lakh shares in the open market and hike the share price to around Rs120-125 and eventually into the F&O segment." It further revealed that Mr Dangi, along with one Akash Bhansali of Enam Securities and the promoter of Welspun Gujarat Stahl Rohren was proposing to purchase 5-10 million shares, so as to push up the share price.

During August, it was found that Mr Dangi continued to collude with BK Goenka, promoter of Welspun Corporation, with the objective of manipulating the share price towards Rs400 by November 2010. Mr Bhansali and the Janus Capital group were also roped in to buy in a sustained manner. Janus was to buy 2.5 million shares at around Rs260. The cartel expected that a sustained rise in prices would attract buying from LIC which would then take the scrip to much higher levels.

But this was merely the tip of the iceberg. Mr Dangi was also active in the Prakash Steelage stock, selling 1.3 million shares at Rs225 through Edelweiss Capital. Of the total sale, the report says, 0.8 million shares were from the account of one Pawan Bansal. Earlier, Mr Dangi and his associates had accumulated large quantities of the scrip through various entities, including Pacific Corporate Services. After booking profits, Mr Dangi was involved in heavy selling of this counter.

Further, Mr Dangi, in collusion with the promoters, was also involved in the counter of Amar Remedies and was responsible for raising the price of the share to Rs102 as on 23 August 2010. Subsequently, Mr Dangi was scheduled to go to the UK to organise an FCCB issue at a stock price of Rs150. In another counter, Sahyadri Industries, Mr Dangi had bought a 20% stake out of which 14% was in his own company's name (Pacific Corporate Service), while 6% was in the name of his associates. In consultation with the promoters, Dangi directed his associates to buy the scrip taking the price up to Rs195 and beyond. Meanwhile, Mr Dangi continued to be active on the stocks of Core Projects and Technologies, Orchid Chemicals and Pharmaceuticals and Panasonic Home Appliances India Company.

In September, says the IB report, Mr Dangi was accumulating to hike the price of shares of Welspun Corporation with the objective of placing it with institutional investors. In co-ordination with the promoters, Mr Dangi purchased 9 lakh shares from India Fund at Rs263.80 per share in the books of its front entity, Pacific Corporate Services. The bulk buying was an effort to prevent the fall in the price of the scrip. Further, in respect of Gokul Refoils & Solvent, Mr Dangi was instrumental in raising the share price to Rs130, then allowing it to cool down to Rs 100. This was as per the laid-out plan for manipulation, which involved the placement of 40 lakh shares with domestic institutional investors at Rs100.

Meanwhile, Mr Dangi, at the behest of the promoter, attempted to pick up all floating stock from the market in respect of J Kumar Infraprojects (JKIL) and then placed the scrip with institutions. About 75,000 shares were also transferred from the promoters' account to Mr Dangi's account, with the further prospect of three lakh shares being exchanged on 23 and 24 September 2010. Mr Dangi was also in contact with Anand Rathi in this context. Bulk deals in JKIL on 22 September featured Pacific Corporate Services and Cello Finance Corporation, linked to Pradeep Rathod. Mr Dangi was also active on the counter of Parekh Aluminex in which the promoter wanted the share price to rise to Rs1,000. Mr Dangi held around 10% of Aluminex.

It was also found that Mr Dangi, along with Anand Rathi and Pradeep Rathod, in conjunction with the promoters, proposed to operate the Ackruti City scrip. The game-plan included raising the price of the scrip to around Rs700 for placement with fund managers.

While the IB reports blandly reproduce such explosive and eye-popping information, complete with the names of top institutions, it is not clear if any of these details are being investigated by SEBI.

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COMMENTS

nagesh kini

4 years ago

What preventive steps contemplated by SEBI? Locking the stable after the horse bolted?

nagesh kini

4 years ago

What preventive steps contemplated by SEBI? Locking the stable after the horse bolted?

hemant

4 years ago

Awesome Job.Eye-popping manipulation in stock market.Hats off to superb investigative journalism from Sucheta Dalal and Moneylife team. Will wait to read more skeletons coming out in the ensuing days.
Keep up the fantastic job!

citizenindia

6 years ago

There are scams in 80% of IPOs, non performing loans to aviation and real estate sector is being downplayed, restructuring of loans , BIFR, evergreening of loans by banks as in the case of ispat as pointed out by moneylife itself, these are all scams . big groups like junior ambani and mallya are in deep trouble, big fund managers are busy giving investor money to fund the ambitions of these paper tycoons, its all happening in front of our eyes. the biggest guys are being accomodated by LIC. promoters have understood that there is more money to be made in the stock market than in their own businesses. So if an AV birla tries to take his group and the country to the world and gets the timing wrong, no problem, just allot a few warrants and low prices and increase your holding at pathetic prices, come on tv projecting yourself as rescuer to your rights issue, restructure your cement busines and you would have recovered the losses! and trust cnbc to give you an award too. want to be a billionaire overnight? get scare resources like spectrum or some mine or land alltoments from your politco friends, pledge the same with the bank and get a loan sanctioned, go to a fund manager and ask him to infuse some equity or merchant banker asking for IPO by giving him a cool fees , get cnbc or ET to do an interview, take more loans and add more equity and continue the loan equity juggernaut and in a few years you can be anil agarwal, the tycoon who created jobs for indians! sometimes these are opportunities though. For instance in the case of welspun, i think as far as their business model is concerned , they are leaders in their respective sector . their balance sheet i dont think is cooked. during their CDR and capital reduction, they managed to wipe out their past sins at the cost of their creditors and shareholders, trying to get to place your shares at high price is something shareholders like me love! and nobody remembers thse things after few years. people still buy himachal! they still buy rolta! and when did banning a person from trading in markets ever stop them from trading!as if all trades are done only personally. The system will change slowly and we as investors too need to look for warning signs. Companies like austral coke and resurgere are allowed to come with ipos! ganesh jewelry , etc etc etc emaar is trying , sahara , HCC , all real estate guys , aviation guys , they all have their eyes on your money and mine. beware

Guest

6 years ago

Some of the company has appreaed in all the SCAM like welpsun - Income Tax Raid -delacred 600 Cr . LIC SCAM - Share to LIC commission given to Money Matters . Price Rigging for FCCB issue and shares to Institutions .

Investors are fool . and Comapny will get awards and rewards from Govt .

sanjeevreddy

6 years ago

GOOD

Santhana

6 years ago

Mr. Bhave has announced that investors need not worry. see attached link.
http://www.thehindubusinessline.com/2010...
Is he in this world or any other? If he had lost his money would he be so cool and say these useful words?

investor

6 years ago

can someone explain Edserve wild swings

NAVIN G BISSA

6 years ago

Is this new to this market!!?.This is the way how these all things takes place.See after all this is a stock-trade..satta bazar.This all proves that the so called smart operators are making money and small investors (as usual) are paying for it.Either these operators keep eye on MF money or Big institution's..like lic and uti's fund(which is actually of common small investors).If possible please check the case of core projects for last three years.Many more shoking things will come out.How these shares get in and out of F&O,who changes the ckt limits frequently for these type of shares..and good many things!!!.So this is the true picture of eratic price movement in the stocks,

Santhana

6 years ago

Satta game is more safe than Indian stock market thanks to SEBI, NSE and the other national financial instituitions. SEBI is doing a great job promoting these game players for the financial inclusion of the masses. The poor public had been denied the advice and services of the IFAs by banning their commission. what a game plan!! worthy story for a movie. who will play the lead role? Bhave, Ketan Parekh or Bahnsali. All are fit candidates.

REPLY

manoj

In Reply to Santhana 6 years ago

The SCAM of SEBI and its officers is of much bigger scale then 2G scam,because in this satta bazar their is daily SCAM of 2 lac crore daily(going up or going down with just up/down of 300-400 points in sensex,all stocks moving one day upward and falling next day(is this fundamental investment or Satta game)-i must agree that even Satta is better regulated though it is illegal,so if SEBI and its officers are raided by CBI or a public interest litigation is lodged against doings of SEBI,i am sure a whole grave yard of SKELETONS will come out surely-so why CBI is waiting?why IT deptt is waiting?if IT deptt wants a big chunk-it should raid these people who have played with savings of retail investors in nexus with operators and promoters.

sreepathi

6 years ago

Whether Anand Rathi as mentioned in the article and Anand rathi securities promoter one and same ?

SUBHASH MEHTA

6 years ago

Correction:
Sorry. I wanted to say that "All the persons named in this article as well as all others charged for induldging in manipulation of share prices, should not by called by Business Channels of Television, as so called 'Experts'.......

All such persons should be Blacklisted by the Media, in the interest of retail investors.

REPLY

INVESTOR

In Reply to SUBHASH MEHTA 6 years ago

Media equally guilty . Barter deals, NDTV Guardian spat , tapes . How will media cos be unbiased when some are like stock operators themselves?

guest

In Reply to INVESTOR 6 years ago

We will forget all promoter would be multi billionior and Govt Manmohan sigh will give them Awards . Ref ( welspun best emerging corp Award )

rahul

In Reply to guest 6 years ago

if u all dont know any thg plz dont comment bullshit.....................


Nobuddy had made a loss from these investor.....who r banned

SUBHASH MEHTA

In Reply to INVESTOR 6 years ago

I think that SEBI can also start registration of the experts by taking some fee and fix some ethics for them, as done for Stock Brokers, Sub-Brokers, Mutual Fund Distributors etc. Duly registered experts can only be speak on television, write articles in print media, internet etc.

SUBHASH MEHTA

6 years ago

All the persons named in this article as well as oll others charged for induldging in manipulation of share prices, should be called by Business Channels, as so called 'Experts'. Financial Magazines and Newspapers should also stopped publication of their articles. Mr. Anand Rathi and some others are often seen in TV Channels, recommended buying in stocks, being manipulated by their broking firms and their other channels.

REPLY

Ravindra Shetye

In Reply to SUBHASH MEHTA 6 years ago

Too much to expect from our channels who themselves have no ethics whatsoever. They have a one point agenda 'TRP'.

SUBHASH MEHTA

In Reply to Ravindra Shetye 6 years ago

Yes. Media has no ethics. Earlier there was no ethics in the market. At least market regulator SEBI had brought financial markets under some regulations and ethics (which may not be insufficient as per present situation) for stock-brokers, sub-brokers, Mutual Funds Distributors etc.. My suggestion has been mentioned as a reply to 'Investor' in this debate.

Nagesh KiniFCA

6 years ago

when such manipulators are operating with impunity and playing about with listed shares as if they are small change jacking up and pulling down equity prices why doesn't SEBI which is supposedly a Regulator step in to discharge its duties and put an end to such blatant malpractices by nipping them in the bud and preventing the small investor falling a victim to fraudulent market manipulations?

Narendra Doshi

6 years ago

Could you please confirm if ANY of these stocks ever came under research/recommendation at MONEYLIFE, at ANY point of time ?
One needs to REMEMBER that such a thing CAN HAPPEN to practically ANY stock & hence LEARN TO ACTUALLY be DOUBLY cautious while considering buying them.
Kudos to Mr. Sanket for this FACTUAL info so early.

REPLY

SANarayan

In Reply to Narendra Doshi 6 years ago

Murli Industries was one of the reommended stocks.BW5NE

Fund crunch affecting urban infra projects: Govt

New Delhi: Fund crunch is affecting implementation of a central scheme for developing infrastructure in urban areas with most of the states already exhausting their allocation, Rajya Sabha was informed today, reports PTI.

“Yes.... The states are in need of more funds for their urban infrastructure projects but due to non-availability of funds in their seven-year allocation, it is not possible to commit any further assistance to them,” minister of state for urban development Saugata Roy stated in a written reply to a question in the Upper House.

He was asked whether a fund crunch is affecting the implementation of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

The minister informed the House that a sum of Rs31,500 crore has been allocated as Additional Central Assistance (ACA) for sanctioning of projects under Urban Infrastructure and Governance (UIG) of JNNURM for the mission period of seven years, beginning from 2005-06, and Rs11,400 crore for sanction of project under Urban Infrastructure Development Scheme for Small and Medium Town (UIDSSMT).

“The committed ACA against the above mentioned provision is Rs27,748.18 crore for UIG and Rs10,435.93 crore under UIDSSMT,” he said.

Some states like Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Maharashtra, Meghalaya, Orissa, Puducherry, Rajasthan, Tamil Nadu, Tripura and Uttar Pradesh have either exceeded or almost reached their allocation under UIG of JNNURM.

“Only states like Andaman Nicobar, Bihar Goa, Haryana, Jharkhand, Lakshadweep, Uttar Pradesh and Nagaland are left with some balance in their seven-year allocation under UIDSSMT,” the minister added.

When asked whether the Planning Commission has also expressed its concern in this context and proposed private sector participation, the minister replied that the commission has favoured encouraging projects being taken up in public-private-participation (PPP).

“Planning Commission in its annual report to the people on infrastructure has mentioned that one of the identified strategies for the mission was to incorporate private sector efficiencies and attract private capital in the development, arrangement and financing of projects, through PPP arrangements,” he said.

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RK Singh appointed as new BPCL chairman

A mechanical engineer RK Singh will hold the reins of BPCL till September 2013

The government has appointed RK Singh as the chairman and managing director of state-owned Bharat Petroleum Corp Ltd (BPCL).

Mr Singh, who currently holds the portfolio of director (Refineries) at BPCL, is likely to assume the new role with effect from 9th December.

In a statement, BPCL said, "Singh has been appointed by the competent authority as chairman and managing director from the date of taking over charge of the post."

A mechanical engineer from Banaras Hindu University, Mr Singh, 57, will hold the reins of the nation's second largest public sector refining and marketing company till September 2013.

The position of chairman and managing director at BPCL fell vacant in August after Ashok Sinha resigned from the job.

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