Description

SEBI adjudication order against Asan Steels Private Limited for executing 24 non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial volume of 57,64,500 units.

Summary

SEBI’s Adjudicating Officer issued an adjudication order (Order/AK/RK/2026-27/32344) against Asan Steels Private Limited (PAN: AAHCA8637P) for alleged manipulation of illiquid stock options on the Bombay Stock Exchange (BSE). The company is alleged to have executed non-genuine reversal trades during the investigation period of April 1, 2014 to September 30, 2015, contributing to artificial trading volumes in the stock options segment.

Key Points

  • Asan Steels Private Limited executed 24 non-genuine trades across 12 Stock Options contracts on BSE
  • These trades created artificial volume of 57,64,500 units in the illiquid stock options segment
  • The broader investigation found 2,91,744 trades (81.40% of all stock options trades on BSE during the period) were allegedly non-genuine
  • The company is alleged to have violated SEBI PFUTP Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a)
  • Show Cause Notice (EAD-1/SBM/VS/14510/2022) was issued on March 31, 2022
  • Original AO Shri Suresh B. Menon was appointed on September 30, 2021; undersigned AO was subsequently appointed on April 03, 2025
  • SCN served through SPAD was returned undelivered

Regulatory Changes

No new regulatory changes introduced. This order is an enforcement action under existing provisions:

  • Section 15-I of the SEBI Act, 1992
  • Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995
  • Section 15HA of the SEBI Act (penalty provision)
  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003

Compliance Requirements

  • Asan Steels Private Limited is required to respond to the Show Cause Notice and adjudication proceedings
  • The Noticee must demonstrate why penalty should not be imposed under Section 15HA of the SEBI Act
  • No new compliance requirements for the broader market arising from this order

Important Dates

  • Investigation Period (IP): April 1, 2014 – September 30, 2015
  • Initial AO Appointment: September 30, 2021
  • Show Cause Notice Issued: March 31, 2022
  • Current AO Appointed: April 3, 2025
  • Order Date: April 2026

Impact Assessment

This order has limited direct market impact as it concerns historical trading activity from 2014-2015. The enforcement action is targeted solely at Asan Steels Private Limited. However, it is part of SEBI’s broader crackdown on manipulation of illiquid stock options on BSE, which collectively involved 2,91,744 allegedly non-genuine trades representing over 81% of total stock options trades during the investigation period. The order reinforces SEBI’s continued pursuit of market manipulation cases, signaling that entities involved in reversal trades to create artificial volumes remain subject to penalties under Section 15HA of the SEBI Act, regardless of the time elapsed.

Impact Justification

This is an enforcement order against a single private limited company for historical trading violations (2014-2015). While the violations are serious (market manipulation via reversal trades), the impact is limited to the specific entity and does not affect current market operations or listed stocks broadly.