IN FIVE separate orders, a special court recently rejected applications filed by former stock broker Ketan Parekh and his co-accused to compound offences against them. Parekh, linked to the securities scam in 2011, and others, are facing trial for alleged violations of the Securities and Exchange Board of India (SEBI) Act.
The accused had sought to “amicably resolve” the cases by paying penalty with interest and costs, stating that the cost in conducting the prosecution, including the time and energy, is higher than the subject matter of the complaints. SEBI had, however, opposed their pleas.
Special Judge V C Barde took the SEBI’s opposition into consideration while rejecting the plea of the accused. “SEBI Act… is enacted with the object to protect the interests of investors in securities and to promote the development of, and to regulate the securities market… The offence alleged against the accused, though compoundable, SEBI has decided not to compound the same, considering the material against the accused. Therefore, keeping in view provisions of SEBI Act and declining by SEBI, the compounding offence against accused, the matter cannot proceed further for compounding,” he said.
Special Public Prosecutor Anubha Rastogi, representing SEBI, had submitted to the court reasons, including the facts and circumstances of the case and material against the accused that had led SEBI to oppose compounding of the offences.
The accused had sought compounding of the offences in 10 cases in all, of which three remain pending, one was rejected earlier and one was withdrawn. These include cases against companies named Panther Investrade Limited, Gibs Computers Limited, Chat Computers, Netscape Software Limited, Triumph Securities and accused, including Parekh, Kirtikumar Parekh, Kartik Parekh, Kaushik Shah, Ami Parekh and Dhiren Bhatia. The penalty amount differs from Rs 1.5 lakh imposed by SEBI in three cases and Rs 6.5 lakh in two.
The accused had said that they are ready to pay the penalty as per provisions of the SEBI Act. The offence under which they are booked — Section 24 (2) of SEBI Act — provides for punishment of imprisonment for not less than one month, extending up to 10 years, or with a fine, extending upto 25 crore, or both, if penalty is not paid. The Act allows for compounding before the court.