RPG GROUP
The RPG Group’s Financial arm RPG Venture was involved in a fraud case in 2012.The Securities and Exchange Board of India (SEBI) had accused several executives of RPG Ventures, including the managing director Harsh Goenka, of manipulating the share price of a company called Zicom Electronic Security Systems. SEBI launched an investigation into the matter and found that RPG Ventures had executed several trades in Zicom’s shares in a fraudulent manner. The trades involved creating artificial demand for the shares and then selling them at inflated prices to other investors. The investigation revealed that the trades had resulted in a profit of around Rs. 8 crores for RPG Ventures.
SEBI prohibited several executives of RPG Ventures from trading in the stock market and froze their bank accounts. SEBI also imposed a fine of Rs. 50 lakhs on RPG Ventures and a penalty of Rs. 15 lakhs on Harsh Goenka for their involvement in the fraud. The regulator SEBI further directed RPG Ventures to give away the illegal profits made from the trades. The case went to the Securities Appellate Tribunal (SAT), which is a quasi-judicial body that hears appeals against SEBI’s decisions. The SAT upheld SEBI’s order in 2013, stating that RPG Ventures and its executives had manipulated the market to their advantage. The SAT ordered RPG Ventures to pay the amount earned illegally to SEBI within 45 days.
RPG Ventures challenged the SAT’s order in the Supreme Court, but the court dismissed the appeal in 2015, upholding the SEBI order. The executives involved in the fraud paid the settlement fee to SEBI, and the matter was closed. The case highlighted the importance of maintaining ethical business practices and adhering to regulatory norms. The RPG Group has a reputation for maintaining high standards of corporate governance and has taken several initiatives to promote transparency and accountability in its operations.