The Securities and Exchange Board of India (SEBI) has taken regulatory action against Elitecon International Ltd for engaging in a pump-and-dump scheme with its shares. SEBI noted a significant surge in the company’s stock price followed by a sharp decline, indicating potential manipulative trading practices. The regulator also highlighted abnormal financial growth, with the company’s revenue increasing nearly 686 times over a two-year period.
Investigators suspect that Elitecon International may have issued misleading corporate disclosures to attract retail investors during the price surge. SEBI alleged that insiders, including promoter Vipin Sharma, offloaded shares at elevated levels. The market watchdog is conducting a detailed examination of trading patterns, financials, and entity linkages as part of the ongoing investigation.
SEBI accused Elitecon International of serious disclosure lapses, such as failing to promptly inform shareholders about a Rs 408 crore Goods and Services Tax (GST) action. The investigation is ongoing, and a final order with potential penalties and market restrictions will be issued after the completion of due process. On Monday, shares of Elitecon International settled at Rs 48.38 apiece on the BSE, marking a nearly 5% decline.
