According to SEBI, the company planted false announcements in order to create an opportunity for Vinod Baid to offload his shares in the market at inflated prices and generate artificial interest in the scrip of Gennex Lab
Market regulator Securities and Exchange Board of India (SEBI) has barred Gennex Laboratories Ltd (GLL) and its promoter-chairman, Vinod Baid, from the market for three years due to alleged manipulative dealings related to the company.
However, the regulator dropped the allegations against the company's directors - UC Bhandari, Y Ravinder Reddy and Kishore Jhunjhunwala - as there was "no material to establish that they were in charge of day-to-day affairs of GLL or that the alleged violations occurred with their consent or connivance".
The market regulator said Gennex Lab, earlier known as Prudential Pharmaceuticals, had "planted false announcements in order to create an opportunity for Vinod Baid to offload his shares in the market at inflated prices and generate artificial interest in the scrip of GLL. Vinod Baid, being the promoter, chairman and executive director of GLL has played an active role in issuance of such false announcements that had potential to influence and induce the buying and selling in its shares by investors".
According to SEBI, Baid was instrumental in the issuance of false corporate announcements and fraudulently sold his 9.60 lakh shares in the company through Mercury Fund Management Company, a connected entity of GLL, "taking advantage of the positive impact created in the market by the corporate announcements".
As per the probe, some of the alleged false announcements were related to GLL's investment proposal with Singapore's Innovesco and its 51% stake purchase in Ammana Bio Pharma, among others.
SEBI's show-cause notice had alleged GLL (, its chairman and directors, of making false corporate announcements to create artificial market in the company shares and manipulate the same in a fraudulent manner between 2007 and 2008.
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