SEBI Issues Shocking Order: Trading in Osiajee Texfab Halted as Prima-Facie Fraud Scheme is Uncovered

SEBI Issues Shocking Order: Trading in Osiajee Texfab Halted as Prima-Facie Fraud Scheme is Uncovered​

The Securities and Exchange Board of India (SEBI) has issued a stringent Ex-Parte Interim Order against 19 individuals related to Osiajee Texfab Limited (OTL). The order halts all trading in OTL shares, citing overwhelming prima-facie evidence of a coordinated fraudulent scheme designed to artificially inflate the stock price.

The investigation centers on allegations that key management and associated entities manipulated the share price through deceptive practices, despite the company's core business activities being financially negligible. This intervention underscores SEBI’s commitment to market integrity and investor protection against manipulative trading practices in emerging companies.

Financial Misstatements and Misleading Corporate Announcements​

SEBI's findings reveal a major disparity between OTL's publicly presented narrative and its actual financial performance. Despite repeated statements claiming "improved operational performance" and the "steady growth" of the textile business, the investigation noted that revenue from OTL’s core textile operations was Nil or negligible for both FY 2023-24 and FY 2024-25.

Almost all of OTL's substantial consolidated revenue is derived from its wholly owned subsidiary, Osiajee Agro Farms Limited (OAFL). The management subsequently made a misleading corporate announcement on May 13, 2026, asserting the growth of the textile business, which contradicts the financial realities documented in the company’s annual reports.

Market Skewing and Concentrated Trading Activity​

The share price of OTL experienced significant volatility, rising from Rs. 50.40 on January 30, 2025, to a high of Rs. 495.50 (intraday) on May 12, 2026, during which no major positive corporate announcement supported the surge.

During the critical period from April 30, 2026, to May 14, 2026, market data showed extreme trading concentration among a select few investors. The top 10 LTP contributors accounted for a staggering 67.38% of the total positive Last Traded Price (LTP) movement in OTL shares during that time frame.

These concentrated trades were executed through a single branch of Shreni Shares Limited (SSL), which was managed by Mr. Akashdeep Jain, the husband of OTL's Managing Director (MD). The lack of documented evidence regarding order placement at this key intermediary further suggests coordinated price manipulation.

Evidence of Collusion and Operational Fraud​

SEBI’s surprise site visits conducted on May 20, 2026, revealed multiple instances of severe operational misconduct linking the involved parties. It was found that OTL, the SSL branch in Hoshiarpur Punjab, and Navraav Electro Limited were operating from the same residential premises, which served as the registered office for all three entities.

The investigation also uncovered complex financial interrelationships among the Noticees. This includes fund transfers between top LTP contributors and affiliated parties, transactions involving Mr. Sarvjeet Singh Taneja (Noticee No. 15), and linkages with Navraav Electro Limited. These overlapping financial dealings are viewed by SEBI as forming a cohesive and interconnected network designed to artificially boost OTL's price.

Directions and Disgorgement of Wrongful Gains​

In view of the prima-facie findings that the Noticees operated within a scheme designed to defraud investors, SEBI has issued stringent directions against all involved parties. The primary directive restricts all 19 named Noticees from buying, selling, or dealing in Osiajee Texfab Limited securities until further orders are received.

Furthermore, significant attention was paid to the conduct of SSL following the site visit. SSL sold its entire holdings in OTL quickly thereafter and generated a gross gain of Rs. 82,56,861.58. Therefore, Noticee No. 13 (Mr. Akashdeep Jain) is directed to deposit this exact amount into a fixed deposit account with SEBI as the lien holder within 15 days of receiving the order.

This swift and severe intervention from SEBI highlights its commitment to maintaining market transparency, ensuring that the proceeds derived from fraudulent practices are secured for disgorgement proceedings, thus restoring confidence in the integrity of the securities markets.