Mumbai: SEBI imposed a total fine of Rs 40 lakh on five entities for violating securities market norms, including non-compliance with the regulator's summons in a case related to shares of Mahan Industries Ltd (MIL). In five separate orders, the Securities and Exchange Board of India (SEBI) slapped a penalty of Rs 9 lakh each on Gazala Constructions, Nazima Impex, Jayalalita Commodities and Kinita Real Estate.
It also imposed a fine of Rs 4 lakh on Indivar Traders. SEBI found that four entities -Gazala Constructions, Nazima Impex, Jayalalita Commodities and Kinita Real Estate had not made timely disclosures about change in their stake in MIL, had failed to submit full details sought by the regulator in the summons and had not appeared before the Investigation Authority (IA).
"The noticee by their failure to make requisite disclosure have deprived investors of important information at the relevant point of time," SEBI said in similarly-worded orders on April 24. "Further note that by not submitting complete details to summons as well as not appearing before the IA for giving evidence despite having received summonses compromises the regulatory framework and hampers the investigation," it added.
In the case of Indivar, SEBI noted that the entity had not complied with summons issued by SEBI as it had not provided complete information sought by the IA. "The noticee (Indivar) did not comply with the summons dated February 22, 2013 and March 8, 2013 when it failed to submit full and complete information to IA as well as when it failed to make personal appearance before IA as sought vide the said summonses respectively," SEBI said.
SEBI had conducted probe into the dealings in shares of MIL and observed that on January 4, 2010 the company had made a preferential allotment of convertible equity warrants. However, it was noted that pursuant to conversion of equity warrants into equity share by MIL, the alleged entities held 5 per cent or more shares of the company and were under obligation to make disclosure about their shareholding in the firm, within stipulated time, which they failed to do.
