Ruchi Soya plummets 20% on Sebi order on castor seed manipulation

NEW DELHI: Shares of FMCG firm Ruchi Soya Industries ended higher by 2.5 per cent knock on Wednesday after market watchdog Sebi barred the largest domestic soya oil producer from dealing in the securities market for indulging in manipulative and fraudulent activities in castor seed contracts.

“Preliminary examination, inter alia, revealed that one client, namely Ruchi Soya Industries, which was holding significant positions in castor seed contracts, has transferred funds of around Rs 76.77 crore during the period of January 01, 2015 to January 27, 2016 to five clients, who were also holding significant positions in castor seed contracts,” Sebi said in a note. (See table).




(Image source: Sebi)

It has been prima facie observed that Ruchi Soya has financed/ provided funds to the aforesaid five clients for taking open position in castor seed contracts and further to maintain positions held by them in castor seed contracts, Sebi said.

“It has been also noticed that the funds transferred by Ruchi Soya to these clients were then transferred to the respective commodity trading members by the clients and using which these clients created positions in castor seed contracts,” the Sebi said.