SEBI Slaps Rs5 Lakh Penalty on Entities for Violating Market Regulations in Cool Caps Case
The Securities and Exchange Board of India (SEBI) has imposed a significant penalty of Rs5 lakh on multiple entities, including Dorni Vinimoy Pvt Ltd, H and K Realestate LLP, and Timely Financial Consultants Pvt Ltd, for engaging in unfair trade practices and violating disclosure norms in the trading of Cool Caps Industries Ltd.
SebiCool Caps IndustriesMarket RegulationsPenaltyUnfair Trade PracticesReal EstateSep 18, 2025
SEBI investigated the trading activities of Cool Caps, listed on the National Stock Exchange (NSE)’s SME-Emerge platform, from April 7, 2022, to January 18, 2023. The investigation revealed significant price movements, with the stock price rising from Rs44.35 to Rs543.95, an increase of 1,126% over 192 trading days. The regulator found that a group of connected entities, including the penalized parties, were consistently trading with each other, accounting for a large share of the total market volume and contributing significantly to the price rise.
SEBI's analysis showed that Dorni Vinimoy and other connected entities engaged in unfair trade practices by repeatedly buying above the last traded price, creating artificial price movements. Their trades were found to have added substantially to the last traded price (LTP) during different periods of the investigation. Additionally, SEBI discovered that Timely Financial Consultants and its persons acting in concert (PACs), including the other noticees, failed to disclose a change in their shareholding after crossing the 2% threshold under Regulation 29(2) and 29(3) of the SAST Regulations. Their collective holding had increased by 2.13% on July 6, 2022, but the disclosure was not made within the mandated time.
While the penalized noticees argued that the violation was ‘technical,’ SEBI held that disclosures are a mandatory obligation aimed at ensuring market transparency. The regulator concluded that both unfair trade practices and disclosure lapses had occurred, leading to the imposition of the Rs5 lakh penalty.
This decision by SEBI underscores the regulator's commitment to maintaining market integrity and transparency. It sends a strong message to market participants that violations of market regulations will not be tolerated, and significant penalties will be imposed to deter such activities in the future.
Frequently Asked Questions
What entities were penalized by SEBI?
SEBI penalized Dorni Vinimoy Pvt Ltd, H and K Realestate LLP, Timely Financial Consultants Pvt Ltd, Upendra Narayan Choudhary, Durgeshwari Devi Choudhury, Gopalji Choudhary, and Rupa Kumari.
What was the penalty amount imposed by SEBI?
SEBI imposed a penalty of Rs5 lakh, to be paid jointly and severally by the penalized entities.
What violations did these entities commit?
The entities were found to have engaged in unfair trade practices by repeatedly buying above the last traded price and creating artificial price movements. Additionally, they failed to disclose a change in their shareholding after crossing the 2% threshold.
How did SEBI discover these violations?
SEBI conducted an investigation into the trading activities of Cool Caps Industries Ltd, listing the significant price movements and the trading patterns of the penalized entities.
What is the significance of this decision by SEBI?
This decision underscores SEBI's commitment to maintaining market integrity and transparency. It sends a strong message that violations of market regulations will not be tolerated and will result in significant penalties.
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