JPMorgan-Owned Entity Behind ₹960 Crore Sensex Manipulation
On August 13, India's Sensex index saw an unusual spike in the last ten minutes of trading. The index jumped by about 240 points due to buy orders across all thirty Sensex companies, priced at the maximum allowed. A significant portion of these orders were later cancelled.
The Securities and Exchange Board of India (SEBI) investigated this incident and found that the entity responsible was Copthall Mauritius Investment Limited, which has been barred from trading until further notice. However, a closer look at Copthall reveals a more complex situation.
Copthall is actually a subsidiary owned outright by JPMorgan Chase & Co., one of America's most influential financial institutions. This information comes directly from the US Securities and Exchange Commission records, which list Copthall as a 100% owned subsidiary with its jurisdiction in Mauritius.
SEBI's order does not mention JPMorgan anywhere, but it does identify two separate accounts held by Copthall: an ODI account and a non-ODI account. The difference between these two is crucial, as the ODI account allows hedge funds to bet on Indian shares without disclosing their owners or submitting to Indian rules.
Copthall assembled a large position in Sensex options on the morning of expiry day, with a notional exposure of approximately ₹960 crore. This position gained or lost ₹1,23,400 for every single point the Sensex moved. SEBI's order froze ₹2.96 crore and identified the trades that manipulated the index.
The regulator's actions raise questions about who stood behind this position and whether the money frozen belonged to Copthall or someone else. Additionally, SEBI's order does not address a potential breach of new rules on offshore derivative instruments, which were rewritten in December 2024 to close loopholes.