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How the bourses and SEBI help fraudulent promoters of suspended companies
In four separate orders dated 28th February, SEBI has imposed a penalty of Rs5 lakh each on Parag Vanijya and Lucky Holdings and Rs3 lakh fine each on Khushi Distributors and Raxon Motor Finance for not submitting complete information required by the regulator
The Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs16 lakh on four entities for failing to provide information sought by it in a case related to alleged share price manipulation by Sanjay Dangi group and associates.
In four separate orders dated 28th February, SEBI has slapped a fine of Rs5 lakh each on Parag Vanijya and Lucky Holdings and Rs3 lakh fine each on Khushi Distributors and Raxon Motor Finance.
Read the earlier Moneylife report: Sanjay Dangi’s portfolio stocks hit by margin pressures?
The regulator said these entities had not submitted complete information, including investments made in dummy firms created by Murli Industries, bank details of promoters, shareholder and investments in other private companies among others, required by it.
“I note that not submitting complete details to the summons despite having the same appears to be an act on part of the noticee (Parag Vanijya, Lucky Holdings, Khushi Distributors and Raxon Motor Finance) to not co-operate with the regulatory mechanism,” SEBI adjudicating officer Piyoosh Gupta said in a similar worded order.
“I also note that such non-cooperation and default definitely compromises the regulatory framework and acts as an impediment to the functioning of the investigation process of SEBI,” he added.
The regulator had passed an interim order in December 2010 banning Dangi, his associates and promoters of four companies—Murli Industries, Ackruti City, Welspun Corporation and Brushman India- from dealing in the equity markets following allegations of price manipulation. (Read more: Sanjay Dangi, another barred market manipulator, still pulling strings)
The SEBI order had followed an income tax department probe. The regulator’s probe had revealed a well-planned strategy to manipulate the share price of the company before the issuance of the Foreign Currency Convertible Bond (FCCBs).