At the heart of the controversy is Dubai-based NRI investor Jahangir Panikkaveettil Perumbarambathu (JPP), who has earned a windfall gain of Rs 1.14 by selling a portion of the LS industry stake. Sebi’s interim order revealed that JPP initially acquired 10.28 crore stakes for just $1. Despite the company’s revenues being negligible, the remaining holdings are valued at Rs 698 as of February 10, 2025, following a significant price surge.
Investment raises concerns about FEMA violations
JPP’s investment was worth an astounding $328.6 million at the company’s peak rating, raising concerns over a possible violation of FEMA regulations. Sebi noted that despite selling only a small portion of his stock during the market highs, JPP made great profits while returning a substantial amount of money to Dubai.
Regulators observed that LS Industries and its key associates artificially inflated the company’s stock price despite its weak financials. Former company director Suet Meng Chay transferred 12.12% stake to JPP for just $1.
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Market manipulation claim
A Sebi survey revealed that JPP’s trading activities coincided with two major price increases periods between July and September and November. He mainly offloaded the stock at the peak of 267.50 shares on September 27, 2024, raising questions about adjusted trading patterns.
Ashwani Bhatia, a full-time member of Sebi, said LS Industries, its promoter’s profound finance, and its JPP appears to be part of the manipulation scheme to deceive investors. “We need to act before another pump and dump scheme can harm innocent investors,” Batya emphasized.
Robochef’s acquisition brings more doubts
The incident draws even more attention as LS Industries announced its planned acquisition of Robochef. Sebi has expressed concern that relatives of Robochef’s directors, including Suresh Goyal, Alka Sahni and Shashi Kant Sahni Huf, sold their shares during the price spike, earning significant profits. Despite zero revenue, this suggests irregularity in the company’s stock price movement. Sebi is currently conducting a deeper investigation into potential violations of the PFUTP (prohibition of fraudulent and unfair trade practices) and LODR (listing obligations and disclosure requirements).
With the number of public shareholders, which increased from 3,892 in June 2024 to 6,106 by December 2024, Sebi highlights the urgency of actions to protect investors and maintain market integrity I did.
