Description

SEBI imposes penalty of Rs. 8,00,000 on Harish Kumar Sakaria for violations of PFUTP Regulations related to price manipulation in Gala Global Products Limited scrip during December 2017 to March 2018.

Summary

SEBI has issued an adjudication order against Mr. Harish Kumar Sakaria (PAN: AXFPS3805D) imposing a penalty of Rs. 8,00,000 for violations of Section 12A(a), (b), (c) of the SEBI Act read with Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a), (e) and (g) of the PFUTP Regulations. The violations relate to alleged manipulation in the scrip of Gala Global Products Limited (GGPL) during December 28, 2017 to March 20, 2018. The original adjudication order dated March 22, 2022 was set aside by the Securities Appellate Tribunal (SAT) and the matter was remanded back to SEBI for fresh adjudication.

Key Points

  • Penalty of Rs. 8,00,000 imposed on Harish Kumar Sakaria under Section 15HA of SEBI Act
  • Violations of PFUTP Regulations related to price manipulation in GGPL scrip
  • Investigation period: December 28, 2017 to March 20, 2018
  • GGPL scrip price increased from Rs. 161 to Rs. 397, representing 146.58% increase during investigation period
  • Original adjudication order dated March 22, 2022 was challenged before SAT
  • SAT vide order dated August 07, 2025 set aside the original order and remanded matter back to SEBI
  • Fresh adjudication proceedings initiated following SAT directions
  • 26 entities were identified during investigation for potential involvement in manipulation
  • Analysis conducted included synchronized trade analysis, reversal of trade analysis, Last Traded Price (LTP) analysis, New High Price (NHP) analysis and first trade analysis

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action under existing PFUTP Regulations.

Compliance Requirements

  • Mr. Harish Kumar Sakaria is required to pay the penalty of Rs. 8,00,000
  • Payment to be made within 45 days of receipt of the adjudication order
  • Market participants must ensure compliance with PFUTP Regulations prohibiting fraudulent and unfair trade practices
  • Entities must avoid engaging in activities that manipulate or artificially influence security prices

Important Dates

  • Investigation Period: December 28, 2017 to March 20, 2018
  • Original Adjudication Order: March 22, 2022
  • SAT Appeal Filed: Appeal No. 482 of 2024
  • SAT Order (Remand): August 07, 2025
  • Fresh Adjudicating Officer Appointed: August 18, 2025
  • Notice for Appearance: August 20, 2025
  • Scheduled Appearance Date: August 28, 2025
  • SCN Provided to Noticee: September 04, 2025
  • Adjudication Order Number: Order/JS/VC/2025-26/31784

Impact Assessment

Market Impact: Medium - The order reinforces SEBI’s continued surveillance and enforcement against price manipulation activities. The significant price movement in GGPL scrip (146.58% increase) during the investigation period highlights the manipulative activities that were under investigation.

Regulatory Impact: This case demonstrates SEBI’s commitment to pursuing enforcement actions even after remand from appellate authorities, ensuring proper adjudication process is followed. The fresh adjudication following SAT’s directions shows the regulator’s adherence to due process.

Investor Impact: The enforcement action provides investor protection by penalizing manipulative activities that distort fair price discovery. The substantial penalty serves as a deterrent against similar violations.

Procedural Impact: The case highlights the importance of proper adjudication procedures, as the original order was set aside by SAT and remanded for fresh consideration, emphasizing the need for thorough hearing and consideration of defenses.

Impact Justification

Enforcement action against individual for market manipulation with significant penalty. Case involves price manipulation that increased scrip price by 146.58%. Matter remanded by SAT and fresh adjudication order issued.