SEBI Confirms Market Ban on LS Industries, Promoter, and Associates

On Friday, May 30, the capital market regulator, the Securities and Exchange Board of India (SEBI) reaffirmed its decision to bar LS Industries, its promoter Profound Finance, and 4 associated individuals from participating in the securities market. The action stems from an ongoing investigation into allegations of fraudulent conduct and manipulation of the company’s stock price.

Investigation by SEBI

The individuals named in the confirmatory order include Profound Finance (the promoter entity), Dubai-based NRI shareholder Jahangir Panikkaveettil Perumbarambathu, Suresh Goyal, Alka Sahni, and Shashi Kant Sahni HUF. These entities will continue to be prohibited from accessing the securities market until the completion of the probe.

“I hereby confirm the directions issued in the interim order dated February 11, 2025,” SEBI Whole-Time Member Ashwani Bhatia stated in the confirmatory order.

SEBI has extended the timeline for concluding its investigation to November 15, 2025, and directed all involved parties to fully cooperate with the inquiry.

The case dates back to February 2025, when SEBI initially passed an interim order restraining LS Industries and the associated individuals after detecting signs of stock price manipulation and fraudulent activity. At the time, Perumbarambathu was ordered to disgorge alleged unlawful gains of ₹1.14 crore earned through the sale of shares under what SEBI described as a prima facie fraudulent scheme.

The investigation revealed that LS Industries, despite recording negligible revenue over the past three financial years (FY22–FY24) and the first three quarters of FY25, saw its stock price surge more than tenfold—from ₹22.50 to ₹267.50—between July 23 and September 27, 2024. This dramatic increase propelled the company's market capitalisation to an unsustainable ₹22,700 crore, despite no fundamental improvement in its financial health.

Also Read: SEBI Cracks Down on Market Manipulation in Sadhna Broadcast Case

SEBI flagged suspicious trading patterns, including unusual share transfers to Perumbarambathu and significant stock price movements not backed by business performance, as potential indicators of a coordinated effort to mislead investors.

According to SEBI, these actions appear to constitute a broader scheme to deceive the market and investors, potentially violating provisions of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations.

Conclusion

The investigation remains ongoing, and the regulatory body has reiterated its commitment to safeguarding market integrity and protecting investor interests.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.