New Delhi, Jun 30 (PTI) Capital markets regulator Sebi on Tuesday levied a total fine of Rs 1.39 crore on Finalysis Credit and Guarantee Co Ltd and 20 other entities for flouting market norms while dealing in the scrip of the firm.
Sebi carried out an inspection of books of record and other documents of Link Intime India Pvt Ltd, a registrar to an issue and share transfer agent, in respect of the processes being followed by it in executing investor requests.
It was observed that many investor complaints were pending with respect to Finalysis Credit.
Complaints were filed with Sebi by public shareholders of the company after their requests for transfer or dematting of shares were rejected on the ground that the shares had already been dematted or transferred. Thereby, an investigation was carried out.
It was noted that certain entities held 6.84 lakh shares of Finalysis Credit, and consequent to absconding of the promoter of the firm, the entities devised a scheme to initiate fraudulent sale of 93 per cent shareholding of Finalysis Credit, constituting over 51 lakh scrips held by public shareholders.
The entities devised a scheme to defraud the original public shareholders by issuing forged consolidated share certificates and thereafter, fraudulently selling them, making the purchasers believe that the shares transferred to them were original.
In addition, certain entities, while acting in concert with each other, had together acquired shareholding entitling them to exercise over 25 per cent of voting rights in the firm.
In this regard, they were obliged to make a public announcement of an open offer for acquiring shares in Finalysis Credit, but failed to do so.
Other entities, pursuant to change in their shareholding, failed to make the requisite disclosures.
Sebi, in an order, noted that the directors, promoters along with the company shall also be held liable for fraudulent activities brought out during the investigation.
For violating several market norms during the entire process, the regulator slapped a total fine of Rs 20 lakh on Finalysis Credit, while other entities are facing penalty in the range of Rs 1 lakh to Rs 10 lakh.
In two separate orders, Sebi levied a fine of Rs 25 lakh on Blue Bull Equities Pvt Ltd and Rs 5 lakh on Nusarwar Merchants Pvt Ltd for indulging in fraudulent trading in illiquid stock options on the BSE.
During the probe, Sebi observed that both the entities indulged in execution of non-genuine trades and created a misleading appearance of trading in the illiquid stock options contracts, thereby violating the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.
Separately, the watchdog imposed a penalty of Rs 5 lakh on Rakhi Trading in the matter of Scanpoint Geomatics Ltd (SGL) for not making requisite disclosures to the stock exchange, thereby violating provisions of SAST (Substantial Acquisition of Shares and Takeovers Regulations).
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