New Delhi, Jun 18 (PTI) Capital markets regulator Sebi on Wednesday slapped a fine of Rs 50 lakh on Royal Twinkle Star Club and four of its directors for failing to comply with its earlier order that barred them from raising funds from the public.

Omprakash Basantlal Goenka, Prakash Ganpat Utekar, Venkatraman Natrajan and Narayan Shivram Kotnis are the directors of Royal Twinkle Star Club. The penalty is to be paid jointly and severally by the entities, the regulator said in the latest order.

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In March 2014, Sebi directed Royal Twinkle Star Club Pvt Ltd (RTSCPL) and its directors not to collect any more money from investors including under the existing schemes and not to launch any new schemes, among other directions.

In its latest order, Sebi said, "The noticees (RTSCPL and its directors) have violated the directions issued to them vide Sebi's WTM order dated March 7, 2014, by collecting funds from the investors even after being prohibited."

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The markets watchdog found that deposits continued to be made into RTSCPL's bank accounts even months after the ban came into force.

The directors claimed the collections were inadvertent and continued due to auto-debit mandates and decentralised agent operations. However, Sebi dismissed their defence, saying they failed to demonstrate any effort to halt the inflows or inform the agents.

The regulator noted that the directors also cited delay in the issuance of the show cause notice and contended that they were prejudiced by the gap of over a decade.

However, Sebi clarified that the delay was due to overlapping legal proceedings including a stay by the Supreme Court and insolvency-related moratoriums. The matter was resumed only after the apex court allowed the regulator to proceed in August 2024.

The regulator rejected claims of the noticees that the breach was technical in nature, observing that continued fund collection harmed investor interest.

The order came after the Securities and Exchange Board of India (Sebi) conducted examination in the matter of RTSCPL to check non-compliance, if any, of the directions issued vide order dated March 07, 2014, by Sebi's whole time member (WTM).

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