The Securities and Exchange Board of India (SEBI) has disposed of adjudication proceedings against Shreedhar Yellaiah Kodam in a long-running case concerning alleged manipulation in the shares of Well Pack Papers and Containers Limited.
In its order dated September 22, 2026, SEBI found that the alleged synchronised trades linked to Kodam were insignificant in relation to the total market volume. The regulator also noted that the show-cause notice did not establish a Know Your Customer association, fund movement or other connection between Kodam and the entities allegedly involved in the wider manipulative scheme.
SEBI further observed that the available material indicated that his account might have been operated by a third party as a conduit without his knowledge or consent. In the absence of deliberate intent, financial gain or active participation, the regulator held that the allegations under the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003, could not be sustained.
The proceedings were accordingly disposed of without imposing a monetary penalty.
How the Well Pack Papers Investigation Began
SEBI investigated trading in Well Pack Papers and Containers Limited after observing a substantial increase in the company’s share price and trading volume.
According to the order, the share price increased from ₹9.54 to ₹499.45 between November 28, 2008 and March 12, 2010. During a subsequent post-bonus and share-split period from March 15 to June 30, 2010, the price reportedly increased from ₹23.20 to ₹73.90.
SEBI’s investigation alleged that members of a group described as the “Walmiki Shah Group” used synchronised trades and off-market share transfers to create artificial volumes and manipulate the price of the scrip.
In February 2015, an adjudication order imposed a penalty of ₹5 lakh on Kodam under Section 15HA of the SEBI Act. Similar proceedings covered numerous other entities accused of violating Regulations 3 and 4 of the PFUTP Regulations.
SAT Set Aside the Earlier Order
Kodam challenged the 2015 adjudication order before the Securities Appellate Tribunal.
On February 13, 2026, SAT set aside the earlier order insofar as it concerned him, finding that it violated the principles of natural justice. The matter was remitted to SEBI for reconsideration after giving him an opportunity to defend himself.
During the reconsideration proceedings, Kodam received the show-cause notice and its annexures, submitted a written reply and participated through an authorised representative.
The fresh adjudication did not merely review the amount of the earlier penalty. It reconsidered whether the evidence established his participation in the alleged manipulation at all.
The Identity-Misuse Defence
Kodam stated that he was a Class IX-educated Mumbai resident operating a small pan shop and had no knowledge or experience of securities trading.
He claimed that a person named Paras Chaplot had regularly visited his shop in 2009 and falsely presented himself as a chartered accountant. According to Kodam, Chaplot obtained his PAN and signed documents under the pretext of filing income-tax returns that might help him obtain future business loans.
Kodam alleged that the documents were instead used to open bank, demat and trading accounts in his name. He also pointed to mobile numbers recorded with the bank that allegedly did not belong to him, an unknown introducer appearing in the trading-account records and substantial transactions inconsistent with his financial circumstances.
After learning about the alleged misuse, Kodam filed an FIR against Chaplot on February 28, 2025.
SEBI observed that handing signed documents and personal information to a third party reflected a serious lack of caution and diligence. However, carelessness in protecting identity documents was not, by itself, sufficient to prove conscious participation in securities-market fraud.
Trading Volume Was Considered Insignificant
SEBI examined the actual trading activity attributed to Kodam.
During the first investigation period, his synchronised buy and sell trades represented approximately 0.01% and 0.03% of the total market volume. During the second period, the contribution was recorded as 0.00%.
His total net contribution to the last traded price was ₹5.25 across 231 trades.
The adjudicating officer held that the volume was not significant enough to influence or manipulate the market. The absence of evidence connecting Kodam with the other alleged group members further weakened the charge that he acted as part of a coordinated scheme.
This distinction is important. The appearance of transactions in a person’s account may establish that trading occurred, but a PFUTP violation ordinarily requires evidence connecting that person to fraudulent intent, conscious participation or a manipulative arrangement.
Off-Market Transfers and the Zero Position
The investigation also examined off-market share transfers recorded in Kodam’s demat account.
These reportedly included transfers of 10,000 and 5,000 shares to another person. A separate transaction involved 2,69,776 shares being credited from Santosh Vishram Ghadshi and transferred back to him on the same day.
The latter transaction left Kodam’s account with a net position of zero.
SEBI considered this transaction consistent with the possibility that the account had been operated by a third party merely as a conduit. The order did not find evidence that Kodam received a financial benefit from the transfers or knowingly authorised them as part of the alleged scheme.
Why Fraudulent Intent Was Decisive
Regulations 3 and 4 of the PFUTP Regulations prohibit fraudulent, deceptive and manipulative conduct in the securities market. This includes creating a false appearance of trading, executing transactions without genuine beneficial ownership and manipulating a security’s price.
SEBI held that establishing such violations required clear evidence of fraudulent intent, active participation or a conscious meeting of minds.
In Kodam’s case, the regulator found no demonstrated link with the alleged group, no meaningful market impact, no established financial gain and no evidence of deliberate involvement. The essential element of fraud was therefore missing.
As the principal allegations failed, the questions of liability under Section 15HA and the quantum of penalty no longer required consideration.
The Larger Takeaway
The order shows that regulatory liability cannot be imposed merely because trades appear in an account. SEBI must still establish the person’s role, connections, intent and contribution to the suspected manipulation.
At the same time, the case highlights the serious risks of sharing PAN details, signed documents, bank information or blank forms with unverified intermediaries.
Individuals should periodically review their bank accounts, demat accounts, credit reports and income-tax records. Any unfamiliar account or transaction should be reported promptly to the relevant bank, broker, depository participant, police and regulatory authority.
Shunyatax Global Insights
An identity-misuse defence must be supported by evidence. Relevant material may include KYC discrepancies, unauthorised mobile numbers, bank statements, device records, correspondence, financial-capacity documents and timely complaints filed with the authorities.
If you or your business is facing problems involving a SEBI show-cause notice, PFUTP proceedings, unauthorised trading, KYC misuse or demat-account fraud, Shunyatax Global can provide professional guidance to help you respond with clarity and confidence.
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Disclaimer: This article is based on SEBI Adjudication Order No. Order/MS/KS/2026-27/32725 dated September 22, 2026. Its findings concern the specific facts and evidence relating to the noticee. This content is intended for general information and does not constitute legal, investment or financial advice.