New Delhi, Apr 27 (PTI) Markets regulator Sebi on Monday slapped a total penalty of Rs 75 lakh on two individuals for not complying with Sebi's directions related to disgorgement of ill-gotten gains made while issuance of initial public offerings (IPO).

Bhargav Panchal and Hina Bhargav Panchal are the two individuals who have been fined.

Sebi noticed certain irregularities in transactions in shares that were issued through IPO between 2003-2005.

Pursuant to an investigation, Sebi found that certain entities, including Bhargav Panchal and Hina Bhargav Panchal, had violated Prohibition of Fraudulent and Unfair Trade Practices norms and Disclosure and Investor Protection Guideline.

The entities, including Bhargav Panchal and Hina Bhargav Panchal, in concert with a depository participant and financiers, employed fraudulent, deceptive and manipulative practices and cornered the shares meant for retail individual investors in various IPOs.

The entities together made an unlawful gain of Rs 15.9 crore and facilitated financiers and others to make an unlawful gain of Rs 28.48 crore.

Accordingly, Sebi had passed directions of debarment and disgorgement of illegal gains made by the entities in February 2011 for aiding and abetting fraudulent and manipulative scheme for cornering of shares meant for the retail investors.

Apart from other entities, Bhargav Panchal was supposed to disgorge Rs 13,45,536, while Hina Bhargav Panchal was obligated to disgorge Rs 9,91,545.

"The noticees (Bhargav Panchal and Hina Bhargav Panchal) were under an obligation to comply with the directions issued by Sebi. However, the noticees failed to comply with the directions issued to them by Sebi," the regulator said in its order issued on Monday.

Therefore, Sebi has levied a fine of Rs 45 lakh on Bhargav Panchal and Rs 30 lakh on Hina Bhargav Panchal, which is "payable jointly or severally" by them, Sebi said.

In a separate order, Sebi restrained Edynamics Solutions and its officials -- Bharat Gupta, Anita Gupta, Vinod Kumar and Vikas Saini -- from accessing securities market for two years for flouting various market norms.

Besides, the officials have also been banned from holding any position as director or key managerial person in any other company having its securities listed on recognized stock exchange.

The company came out with an IPO in 2013. It was found that it failed to make material disclosures, indulged in misrepresentation of financial statements and also failed to submit statements pertaining to deviation in utilization of issue proceeds.

In this regrad, Sebi had issued an interim order with certain directions against the firm and its officials.

In the latest order, Sebi noted "The noticees have not provided information to the forensic auditor appointed by BSE pursuant to directions given in the interim order. The noticees have also failed to appear and to file any reply in these proceedings."

Noticees refer to the firm and its officials.

Considering the nature of violations and conduct of the entities, Sebi has restrained them from accessing securities market for two years.

(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)