SEBI imposes Rs 24 lakh penalty on 17 entities
The regulator had issued show cause notices to all of them, along with some other entities, for violation of guidelines on disclosure of acquisition of shares. While some of the noticees replied to the show cause notices, Shah and three others did not, Se
Market regulator Sebi has imposed penalty totalling Rs 24 lakh on 17 entities on charges ranging from non-disclosure of acquisition of shares to involvement in fraudulent trade practices in dealing with shares of Platinum Corporation Ltd.
In separate orders, Sebi fined Platinum Corporation Promoter and Director Pratik Shah and 14 others Rs 20 lakh jointly for non-disclosure of acquisition of shares of the company.
It also levied penalty of Rs two lakh each on Shankarlal M Patel and Lakshya Securities and Credit Holdings Ltd for unfair trade practices.
The Securities and Exchange Board of India had earlier conducted investigations relating to trading in the shares of Platinum Corporation.
This had revealed that the company had issued 2.90 crore shares through preferential allotment of Re one each at a premium of Rs 0.25 per share to seven persons, all related to the company, including Shah in January 2009.
The regulator had issued show cause notices to all of them, along with some other entities, for violation of guidelines on disclosure of acquisition of shares. While some of the noticees replied to the show cause notices, Shah and three others did not, Sebi said.
After going through the replies and others facts related to the case, Sebi, in its order said: "They (noticees) managed banking transactions within the group through circular transactions and shown to have paid allotment amount to the Company.
"From the facts and circumstances it is evident that all the preferential allottees... were acting in concert for subscribing shares of the company through preferential allotment".
The regulator further said that they failed to make necessary public announcement to acquire the shares of the company in accordance with existing guidelines.
Sebi said that a penalty of Rs 20 lakh would be commensurate with the violations committed by Shah and 14 others.
In two other separate orders, the regulator levied penalty of Rs two lakh each on Shankarlal M Patel and Lakshya Securities and Credit Holdings Ltd.
This is for facilitating the promoters of Platinum Corporation and connected parties to sell shares in the market by way of off-market transactions in their demat account by acting as conduit for movement of equities in 2004 and 2005.