Business

Securities scam: SEBI bans Arvind Johari for 10 yrs5 Mar 2008, 0046 hrs IST,PTI
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MUMBAI: Market regulator SEBI on Tuesday banned Arvind Johari, owner of Lucknow-based Cyberspace, from trading for 10 years for his involvement in the securities scam in 1999-2001. In addition to Johari, 39 other entities have also been banned from trading for five years for creating false market for Cyberspace shares through artificial trade. “Arvind Johari be restrained from accessing the securities market and prohibited from associating with securities market to buy, sell or deal in securities in any manner for a period of 10 years,” SEBI said in its order. The period of debarment against Johari, following the interim order on April 6, 2001, will be set off, SEBI said. The 39 others,banned for five years, include G N Johari, Anand K Johari, A M Johari and Co and Kamal Infosys. SEBI order said, “Arvind Johari, director of Cyberspace has used undue influence on many of the noticees to yield his manipulative design. Since he was the key player in the game plan, he should be penalised sternly as compared to the penalties to be imposed on other noticees.” During the investigation, the market regulator found unusual movement in the scrip of Cyberspace, mostly engineered by same set of people through trading in a circular manner. Trading in the scrips of the company was suspended at Bombay Stock Exchange and National Stock Exchange in April, 2001. BSE, on a preliminary investigation, found involvement of promoters in activities leading to manipulation of share prices of Cyberspace. Also, following the suspension of trading from the BSE and NSE in April 2001, it was proved that the promoters of the company - Cybersapce - were responsible for entering into trades that were “not genuine trade transactions”. The regulator thus concluded that the promoters carried out transactions in scrip of the company in a deceptive manner with some ulterior purpose and created artificial volumes by using fund raised through preferential allotment of shares.