Sebi's Crackdown: Unmasking Financial Manipulation at Pacheli Industrial Finance

The Securities and Exchange Board of India (Sebi) has banned Pacheli Industrial Finance and six other entities from the securities market due to alleged financial irregularities and stock manipulation. This comes after an investigation unveiled sham loan transactions and stock manipulation schemes designed to inflate the company's market value.

The Securities and Exchange Board of India (Sebi) has taken decisive action against Pacheli Industrial Finance and six associated entities, barring them from participating in the securities market amidst accusations of financial manipulation and irregularities.

The investigation revealed that Pacheli Industrial Finance acquired Rs 1,000 crore in loans from non-promoter entities, without proper disclosure of how the funds would be used. These loans were suspiciously converted into equity via preferential allotment, inflating the company's market value dramatically.

Sebi's interim order pointed out the round-tripping of funds between Pacheli and the lenders. The regulator flagged this as a potential 'pump-and-dump' strategy, aimed at luring retail investors and offloading stocks at peak prices. The entities involved have been instructed to respond within 21 days, as Sebi's detailed probe continues.

(With inputs from agencies.)