Ketan Parekh, co-accused seek compounding of offences

The cases relate to non-payment of penalty to the tune of lakhs of rupees. According to the provisions of the Sebi Act, if the trial ends in a conviction, the accused face at least a month of imprisonment, which may extend to 10 years, or a fine of upto Rs 25 crore or both.

Written by Sadaf Modak | Mumbai | Published: December 13, 2017 3:34:04 am
SEBI, Vijay Rupani, Hindu Undivided Family, Rupani SEBI penalty, indian express, business news Parekh, linked to the securities scam in 2011, and his co-accused, are currently standing trial for alleged violations of the Sebi Act.

FORMER STOCKBROKER Ketan Parekh and his co-accused in ten cases being heard by a special court in Mumbai have sought to compound the offences against them. In applications filed before the court designated under the Securities and Exchange Board of India (Sebi) Act, they have stated that they are ready to pay the penalty imposed by Sebi along with interest and other necessary costs in the cases against them.

Parekh, linked to the securities scam in 2011, and his co-accused, are currently standing trial for alleged violations of the Sebi Act. In their applications, the accused claimed they are ready to pay the penalty “without prejudice and without submission of guilt” and that they have a “strong case” for consideration of compounding of the case in a settlement with Sebi outside court as per its settlement regulations.

“The applicants state that the cost of conducting the prosecution, including time and energy, is higher than the subject matter of the present complaint and hence instead of challenging the same on merit, the applicants wish to amicably resolve the present issue as per provisions of section 24 A of the Sebi Act for compounding the offence,” one of the applications states. It further states that the proposal has been put forward by them to avoid the “hardship of facing the trial and to save time and money and also to have a peaceful life”.

The cases relate to non-payment of penalty to the tune of lakhs of rupees. According to the provisions of the Sebi Act, if the trial ends in a conviction, the accused face at least a month of imprisonment, which may extend to 10 years, or a fine of upto Rs 25 crore or both.

The Sebi had conducted an investigation against the accused in these separate cases, pertaining to acquisition of shares in a company in excess of threshold limits prescribed under Sebi regulations. After an adjudicating process by Sebi, an order was passed directing different amounts of penalty in each of the cases to be paid within 45 days of the order. The accused filed appeals before the Securities Appellate Tribunal, which was dismissed and eventually prosecution proceedings were filed against them before the Sebi court for non-payment.

In their applications, the accused claimed there was no malafide intention on their part to violate any provisions of Sebi and if they have occurred it was “purely unintentional”. The special court has directed Sebi to file a reply. Special Public Prosecutor Anubha Rastogi confirmed that the applications have been filed. As per Sebi’s settlement regulations, a committee will consider the proposal for compounding made by the accused, which will then decide whether it can allow it or the trial will continue. The court is currently hearing the discharge application of Parekh who continues to remain in judicial custody after the Bombay HC rejected his bail last week.

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