SEBI’s Adjudication in the Max Heights Infrastructure Case: A Compliance Perspective

The Securities and Exchange Board of India (SEBI) continues to tighten its enforcement framework to preserve market integrity. In a recent Adjudication Order (Order/JS/YK/2025-26/31691), SEBI addressed manipulative trading activities in the scrip of Max Heights Infrastructure Ltd. (MHIL), highlighting how even seemingly small trades can distort price discovery.

Background

• Entity Involved: Mr. Narendra Ramshankar Dubey

• Investigation Period: October 31, 2022 – March 15, 2023

• Allegations: The noticee allegedly manipulated the Last Traded Price (LTP) of MHIL by placing minuscule buy orders (1–10 shares) at prices above the prevailing LTP, despite the availability of larger sell orders.

  
  

SEBI’s Findings

• The noticee was among the top 10 LTP contributors during the investigation period.

• His small-quantity trades contributed 16.56% of market positive LTP, significantly influencing upward price movement.

• The pattern—consistently placing abnormally small buy orders above LTP—was deemed manipulative and misleading.

• The defence that the trades were made through a mobile app with a one-share minimum order size was rejected. SEBI held that the consistent pattern of trades pointed to manipulation rather than genuine investment behaviour.

  
  

Legal Basis

Violations were established under:

• Section 12A (a), (b), (c) of the SEBI Act, 1992

• Regulations 3(a)–(d), 4(1), 4(2)(a), 4(2)(e) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003

SEBI relied on Securities Appellate Tribunal (SAT) precedents (including Adamina Traders, Tarunkumar Brahmbhatt, Dhiren Dharamdas Agrawal) to emphasize that even absent collusion, trades that create a misleading market appearance qualify as manipulation.