Ranika Investments Penalized Rs 5 Lakh for Illiquid Options Manipulation

Case Details

Entity Involved: Ranika Investments Pvt Ltd (PAN: AAACR5548K)

Order Details: Adjudication Order No. Order/AK/GN/2026-27/32432 dated June 03, 2026

Investigation Period: April 01, 2014 to September 30, 2015

Financial Impact: Monetary penalty of Rs 5,00,000 (Rupees Five Lakhs only) imposed under Section 15HA of SEBI Act, 1992

Persons Involved

Adjudicating Officers: Ms. Asha Shetty (initial AO), Mr. Amit Kapoor (final AO who issued the order)

Counterparties: Jamnalal Rupshibhai Thakker HUF (specifically mentioned counterparty in PLNG15MAY160.00CEW2 contract)

Regulatory Body: Securities and Exchange Board of India (SEBI)

Violations and Allegations

Summary of Violations: The Noticee executed 45 non-genuine reversal trades in 12 stock options contracts on BSE, creating artificial volume of 22,08,000 units during the investigation period.

Regulations Violated: Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations)

Nature of Violations:

• Execution of reversal trades with same counterparties within short time periods
• Trades executed with significant price differences indicating pre-determination
• Creation of false or misleading appearance of trading through artificial volumes
• Lack of commercial basis for rapid position reversals
• Prior meeting of minds between counterparties

Specific Contract Details:

• IDBI15APR60.00CE: 100% non-genuine trades, 100% artificial volume
• IDBI15MAY60.00CEW1: 100% non-genuine trades, 100% artificial volume, 66.67% of market trades
• IDBI15MAY80.00PEW1: 75% non-genuine trades, 97.62% artificial volume, 60% of market trades
• JSWE15MAY105.00CEW1: 100% non-genuine trades, 100% artificial volume
• JSWE15MAY125.00PEW1: 100% non-genuine trades, 100% artificial volume
• MCRS15APR270.00PE: 100% non-genuine trades, 100% artificial volume
• MCRS15MAY220.00CEW2: 100% non-genuine trades, 100% artificial volume, 36.36% of market trades
• PLNG15MAY160.00CEW2: 100% non-genuine trades, 100% artificial volume, 33.33% of market trades, 42.11% of market volume
• PTCI15MAY55.00CEW3: 100% non-genuine trades, 100% artificial volume, 42.86% of market trades, 35.9% of market volume
• PTCI15MAY60.00CEW3: 100% non-genuine trades, 100% artificial volume, 42.86% of market trades, 25.4% of market volume
• PTCI15MAY80.00PEW3: 100% non-genuine trades, 100% artificial volume, 50% of market trades, 51.06% of market volume
• SYND15MAY120.00PEW2: 100% non-genuine trades, 100% artificial volume

Penalties, Settlement Terms & Rulings

Monetary Penalty: Rs 5,00,000 (Rupees Five Lakhs only) imposed under Section 15HA of SEBI Act

Legal Basis for Penalty: Violation of PFUTP Regulations established through preponderance of probabilities test

Judicial Precedents Cited:

• SEBI Vs Bhavesh Pabari (2019) SCC Online SC 294 (reasonable time for proceedings)
• SEBI v Kishore R Ajmera (AIR 2016 SC 1079) (preponderance of probabilities test)
• SEBI v Rakhi Trading Private Limited (Civil Appeal Nos. 1969, 3174-3177 and 3180 of 2011) (synchronized trading as manipulative)
• Global Earth Properties and Developers Pvt Ltd (SAT judgment dated September 14, 2020)
• Classic Credit Ltd. vs. SEBI (Appeal No. 68 of 2003) (deemed admission of charges for non-response)

Actions, Compliance, and Future Obligations

Payment Deadline: The Noticee must remit the penalty amount within 45 days of receipt of the order

Payment Method: Through online payment facility available on SEBI website (www.sebi.gov.in) under ENFORCEMENT > Orders > Orders of AO > PAYNOW

Final Ruling and Enforcement

Consequences of Non-Payment: If the penalty is not paid within 45 days, SEBI may initiate recovery proceedings under Section 28A of SEBI Act, including attachment and sale of movable and immovable properties

Order Distribution: Copy of the order sent to Ranika Investments Pvt Ltd and to SEBI as per Rule 6 of SEBI Adjudication Rules

Proceedings Status: Case proceeded ex-parte as the Noticee failed to respond to Show Cause Notice (dated August 01, 2022) and hearing opportunities (hearing granted on May 12, 2026)