February 28, 2018 2:02:11 am
A SPECIAL court on Tuesday sentenced former stock broker Ketan Parekh and Kartik Parekh to three years imprisonment for non-payment of penalty ordered after they were found to have violated rules under the Securities and Exchange Board of India (Sebi) Act. Kartik’s sentence was suspended by the court to allow him to appeal against the conviction, while Ketan, who is in judicial custody in this case, may have to appeal before the Bombay High Court for relief. The two have also been directed to pay Rs 5 lakh as fine each, Rs 3.25 lakh of which will be paid to the Sebi. Two others were acquitted by the court. The court observed that Ketan and Kartik were persons in charge of the business of the company Panther Fincap and Management Services, where they were directors.
According to the Sebi, Panther Fincap had acquired shares of Shonkh Technologies International Limited, beyond the permissible limit without making the requisite declaration under Sebi regulations. Due to this violation, adjudicating proceedings were initiated by Sebi which were completed in 2003 and a penalty of Rs 6.5 lakh-maximum at the point-was imposed on the company. The company appealed against it before the Securities Appellate Tribunal but the plea was also dismissed in 2007.
The accused were directed to pay the penalty within 45 days of the order. Sebi special public prosecutor Anubha Rastogi had submitted before the court that since the SAT order was not challenged by the accused before the Supreme Court, it had attained finality. The accused had approached Sebi seeking to deposit a demand draft making part payment of the penalty in installments, which was not allowed by the Sebi as it was not in accordance with it rules. Due to the non-payment of the penalty, the criminal proceedings were initiated.
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