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The market regulator has disposed of a case against Himachal Futuristic Communications for suspected involvement in rigging share prices in a case dating back to 1999-2001
The Securities and Exchange Board of India (SEBI) has disposed proceedings against Himachal Futuristic Communications Ltd (HFCL) in the 2001 share price manipulation case, with a consent order.
SEBI in an order CO/ID2/739/332/2010 dated 28 January 2010, said: "This consent order disposes of the above mentioned proceedings under Sections 11(4) (b) and 11B of SEBI Act, 1992 read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, pending against the applicants named above in the matter of Himachal Futuristic Communications Ltd."
The market regulator said that HFCL, its promoters and associated entities had paid Rs10 crore towards settlement of the case, as per the recommendation of a High-Powered Committee constituted by SEBI.
"Accordingly, the applicants, without admitting or denying the charges, have conveyed their acceptance of the aforesaid recommendations vide their letter dated 30 December 2009 and have remitted a sum of Rs10,00,00,000/- (Rupees Ten Crore only) towards settlement charges vide demand drafts, payable at Mumbai," the consent order said.
The HFCL case dates back to the 1999 to 2001 period of the Ketan Parekh scam. Mr Parekh, the main accused in the fraud, allegedly rigged share prices of ten companies, including Zee Telefilms and HFCL.
It is now common knowledge that Global Trust Bank (GTB), Zee Telefilms and HFCL were in cahoots with Mr Parekh and had all routed large sums of money to corporate entities connected with him. In 2001, SEBI had told the Joint Parliamentary Committee that Zee and HFCL had diverted Rs515 crore and Rs700 crore respectively to Mr Parekh.
After conducting investigations, SEBI, in 2004, sent show-cause notices to HFCL, its directors and associates. While the proceedings were in progress, on 31 May 2008 and 4 June 2008, HFCL proposed a settlement of the proceedings through a consent order. SEBI then constituted a high-powered committee which also recommended settling the issue if the applicants agreed to make payment of Rs10 crore towards settlement charges.
On 11 January 2010, the Delhi High Court also affirmed the terms of the settlement as recommended by the High-Powered Committee and approved by SEBI, following which the market regulator disposed proceedings against HFCL. (Read more about SEBI’s consent orders http://www.moneylife.in/article/3030.html and http://www.moneylife.in/article/2827.html