INVESTIGATION, ENFORCEMENT & SURVEILLANCE DEPARTMENT

M/s. Radhika Spinning Mills Ltd came out with a public issue of 16,20,000 equity shares during February 1995. SEBI conducted investigations based on the complaints received and during the course of investigations it was found that the promoters had deliberately caused delay in transfer of shares of the company and had declared bad deliveries on certain flimsy grounds with a view to reduce floating stock in the market for market manipulation. The aforesaid act of the RSML had created an artificial scarcity of floating stock in the market as a result of which the scrip price flared during book closure period and thereafter. The price rose from Rs.13/- to Rs.50/-Pursuant to the show cause notice, SEBI has given an opportunity for personal hearing and based on oral submissions and documents on record SEBI has issued directions debarring the company M/s. RSML and its promoters/directors from accessing the securities market for a period of two years.