Sebi court fines man Rs 67 lakh for violations

Hands out four-year prison term for manipulation of share prices.

Written by Sadaf Modak | Mumbai | Published: December 1, 2017 6:03 am
manipulation of share prices, sebi, mumbai court, indian express, express online SEBI (File Photo)

IN ONE of the highest penalties imposed by a Mumbai court designated under the Securities and Exchange Board of India (Sebi) Act, a man convicted in three separate cases for alleged violations has been directed to pay a penalty of Rs 67 lakh. Special Judge M G Deshpande has also awarded a four-year prison term to Tejas Ghelani for manipulating share prices.

According to submissions made by Special Public Prosecutor Sabiha Ansari in two of the cases, Ghelani had allegedly manipulated share prices of three companies Adani Export Ltd, Era Constructions and K Sera Sera, over a decade ago. After an inquiry by an adjudicating authority, Ghelani was directed to pay a penalty for causing losses to investors of these companies.

Criminal action was initiated on non-payment of penalty despite the order by the adjudicating authority.
On Thursday, the special Sebi court found him guilty of alleged violations of relevant sections of Sebi (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Act punishable under section 24 (2) of the Act.

In the first case, Ghelani has been directed to pay Rs 46 lakh, Rs 36 lakh of which are to be paid to Sebi as compensation. In the second case, Ghelani will have to pay Rs 1 lakh, 80 thousand of which will go to Sebi and in the third case, he has been directed to pay Rs 20 lakh, of which Rs 16 lakh is to be paid to Sebi. He has been sentenced to four years in jail in two of the cases — which involved manipulation of share prices — and given a six-month term in the third case, each of them will run concurrently.

Recently, the Sebi court in the city had sentenced two men to a four-year prison term. It was the highest punishment given on similar charges.

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