Sebi slaps Rs 73 lakh fine on 11 entities for flouting market norms

Capital markets regulator Sebi on Thursday imposed penalties totalling Rs 73 lakh on 11 entities for fraudulent trading and disclosure lapses.

Through an order, the regulator levied a Rs 17 lakh fine on Esteem Bio Organic Food Processing Ltd, Rs 8 lakh on Brij Kishore Sabharwal, Rs 7 lakh on Goldline International Finvest Ltd, Rs 6 lakh on Vinod Kumar Garg and Rs 5 lakh each on Satendra Kumar, Madhukar Dubey, Ram Prakash, Avisha Credit Capital Pvt Ltd, Neel Kanth Trading Co, Amsons Apparels Pvt Ltd and Gracious Software Pvt Ltd.

The order came after Sebi conducted an investigation in the matter relating to the IPO of Esteem Bio Organic Food Processing Ltd. The shares were listed on BSE-SME Segment on January 2013.

During the investigation, it was observed that certain entities were connected with Esteem directly/indirectly and had provided funds to IPO applicants for applying for shares in the initial public offering.

The regulator observed that noticee (Esteem) has devised a scheme in collusion with funding group entities to achieve minimum subscription and then deployed the proceeds for purposes other than the stated subjects in the IPO prospectus.

In its 87-page order, Sebi noted that despite repeated requests by the investigating authority, Esteem did not provide the requisite half-yearly disclosures with respect to the unused IPO proceeds to the stock exchange.

Through such acts, they flouted the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations and Securities contracts and regulations Act.

In a separate order, the regulator levied a fine of Rs 20 lakh on Karvy Capital Limited and Rs 10 lakh on Vistra ITCL Ltd for flouting norms with respect to issuance of non-convertible debentures.

Also, in another order, the regulator slapped a fine of Rs 5 lakh on Ambrikav Bizcom over non-genuine trades in illiquid stock options on BSE.

By doing so, the entity violated the provisions of PFUTP norms, the order said.