SEBI Suspends LS Industries and Key Individuals Amid Fraud Investigation
SEBI Takes Action Against LS Industries
Mumbai, May 31: The Securities and Exchange Board of India (SEBI) has announced the suspension of LS Industries, its promoter Profound Finance, and four other individuals from engaging in securities trading.
This decision is part of an ongoing investigation into allegations of fraudulent practices and manipulation of the company's stock price.
The individuals affected by this suspension include Jahangir Panikkaveettil Perumbarambathu, the promoter of Profound Finance, along with Suresh Goyal, Alka Sahni, and Shashi Kant Sahni HUF, a Dubai-based NRI shareholder of LS Industries.
SEBI has extended the investigation deadline to November 15 and has instructed all parties involved to fully cooperate with the inquiry.
In February 2025, SEBI had previously issued an interim order prohibiting LS Industries and its affiliates from trading in the stock market due to suspicious activities.
The regulator also mandated Perumbarambathu to return illegal profits amounting to Rs 1.14 crore, which he allegedly gained from selling shares under the suspected scheme.
The investigation focuses on LS Industries and its associates' involvement in a scheme aimed at artificially inflating the company's stock price.
Despite reporting nearly no revenue over three consecutive financial years (FY22 to FY24) and the first three quarters of FY25, the company's stock experienced a dramatic increase.
From July 23 to September 27, 2024, the share price surged from Rs 22.50 to Rs 267.50, elevating the company's market valuation to an astonishing Rs 22,700 crore.
This significant rise in stock price occurred without any corresponding improvement in the company's financial health, raising concerns.
SEBI's preliminary findings highlighted questionable share transfers to Perumbarambathu and unusual trading behaviors by certain individuals.
The regulator indicated that these elements strongly implied a coordinated effort to mislead investors and manipulate the stock.
SEBI stressed that it appeared, at first glance, that LS Industries and the other involved parties were engaged in a concerted attempt to deceive the market.
The investigation is still in progress, and the involved parties will remain barred from market activities until its completion.