New Delhi, Jul 14 (PTI) Capital markets regulator Sebi on Thursday imposed fines totalling Rs 26 lakh on five entities for flouting disclosure norms and other rules.

In its order, the regulator levied a fine of Rs 10 lakh on Golden Legend Leasing & Finance Ltd (GLLFL), Rs 5 lakh each on Ashok Hiralal Shah HUF, Meena Ashok Shah, Dhanlaxmi Lease Finance Ltd (DLFL) and Rs 1 lakh on Ullash Jayantilal Parikh.

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The order came after Securities and Exchange Board of India (Sebi) conducted an investigation in the matter of GLLFL for the period from January 2013 to February 2014.

The regulator found certain irregularities with regard to issuance of preferential warrants issued by the company to 49 entities.

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Of the 49 entities, Ashok Hiralal Shah, Ashok Hiralal Shah HUF and Meena Shah were the preferential allottees.

Further, GLLFL transferred funds to the accounts of Ashok, Ashok HUF and Meena through DLFL to fund them for the acquisition of warrants of the company in the preferential issue.

"The entities engaged in a fraudulent scheme by giving an impression of capital infusion through preferential allotment while GLLFL's own funds were used by the company," said Sebi's Adjudicating Officer G Ramar said.

He also noted, DLFL assisted in the fraudulent scheme in connection with purchase of warrants of GLLFL in the preferential issue.

Further, Parikh being a promoter of the company offloaded his entire shareholding in GLLFL and thereby reduced to nil, the order said, adding that Parikh failed to inform the exchange about his stake sale as per Sebi's disclosure norm.

The entities violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) and disclosure lapses, Sebi said.

Meanwhile, in another order, the regulator slapped a fine of Rs 20 lakh on Allied Computers International (Asia) Ltd for violating listing conditions and not complying with summons issued by Sebi.

The order came after Sebi initiated an investigation in the matter of Allied Computers International (Asia) Ltd for funding of preferential allottees between November 2007 and September 2012.

The regulator found that ACIL (noticee) had made preferential allotment of equity warrants on two occasions -- on March 01, 2011 and on March 24, 2011-- which can be converted into equity shares and certain preferential allottees had received funds from noticee through other entities which acted as conduits for the subscription of the preferential allotment.

The market watchdog observed that there were changes in the shareholding of promoter and director of ACIL i.e Hirji Kanji Patel during November 2007 to Septembter 2012.

Also, it made wrong disclosure of the shares held by Patel and non-disclosure of its quarterly shareholding report, thereby violating listing conditions.

Further, several summons were issued to him, but he failed to reply.

Therefore, ACIL contravened the provisions of Securities Contracts regulation and other disclosure lapses.

In a separate order, the regulator levied fines totalling Rs 9 lakh on 6 entities for flouting market norms under listing conditions.

The order came after Sebi had conducted an investigation in the matter of trading activities of certain entities in the scrip of Mishika Finance and Trading Ltd (MFTL) during the period from February 2013 to December 2014.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)