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Sebi imposes Rs 4 lakh fine on 2 entities in Sanjay Dangi case

The two entities had failed to comply with the summons in Sanjay Dangi case.

Written by PTI | Mumbai | Published: July 31, 2013 8:43 pm

Capital market regulator Sebi has imposed Rs 4 lakh penalty on two entities for failing to comply with the summons during an investigation into share price manipulation by Sanjay Dangi and associates. In two separate orders issued on Tuesday,Securities and Exchange Board of India (Sebi) slapped Rs 2 lakh each on Lotus Capital Financial Services and Ganga Jamuna Financial Advisors for failure to provide necessary information to the regulator’s Investigation Authority (IA). The summons had sought details from Lotus Capital and Ganga Jamuna regarding their connection and business/financial dealings with any of the entities which were allegedly part of either Ashika Group or Dangi Group,among others. “…the noticee did not submit all the required information/documents as sought by the Sebi summonses dated November 3,2011 and November 22,2011,” the regulator said in the two orders.

It added that “not submitting complete details to the summonses appears to be a deliberate action on the part of the noticee to not cooperate with the regulatory mechanism,especially when sufficient opportunity was provided”. It observed that “such non cooperation and default” is an impediment to the investigation process and is detrimental to the interest of investors in securities market. Sebi had passed an interim order in December 2010 banning Dangi,his associates and promoters of four companies .Murli Industries,Hubtown Ltd,Brushman (India) and Welspun-Gujarat Stahl Rohren. The order was based on a preliminary probe which had found a well-planned strategy to manipulate the share price of the companies before the issuance of the Foreign Currency Convertible Bond (FCCBs).

It was prima facie observed in the interim order that the Dangi group along with the promoters of various companies had indulged in fraudulent and unfair trade practices relating to securities market,among others,Sebi said.

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