Sebi levies Rs 80L fine on 16 cos for fraudulent trade

Sebi levies Rs 80 lakh fine on 16 entities for fraudulent trading in Mapro Industries' scrip

Representative image. (Reuters Photo)

Markets regulator Sebi on Friday imposed a total penalty of Rs 80 lakh on 16 entities for conducting fraudulent trading in the scrip of Mapro Industries Ltd.

The order follows a probe by Sebi into the trading in the company shares between July 2014 and November 2014.

Sebi, from the trading pattern of the entities, noted that the entities manipulated the share price of the company by contributing positively to the LTP (last traded price) which consequently led to the rise in the price of the scrip.

Therefore, the entities have been fined Rs 5 lakh each for violating Prohibition of Fraudulent and Unfair Trade Practices norms.

Apart from nine individuals, the entities include Cosmos Distributors, Bhargabi Trading, Jagsakti Tower, Jahman Agency, Ritudhan Marketing, Godavari Real Estate and V.S.G. Leasing and Finance Co.

In a separate order, Sebi levied a total fine of Rs 40 lakh on Midfield Industries Ltd its chairman and managing director Madhu Mohan Reddy and executive director Ashok Sagar Mudumba for diverting the funds raised from initial public offer (IPO) of the firm.

Out of Rs 59.85 crore of the IPO proceeds, the firm utilized Rs 30.89 crore towards clearing its pre-existing overdraft balance, which was not mentioned in the prospectus.

"The Noticees had committed a fraud in diverting the funds raised through IPO and not utilized the money in accordance with the objects of the issue as stated in the prospectus," Sebi said.

Separately, Sebi slapped a total fine of Rs 22 lakh on MPF Systems and its senior officials-- Kirti Salvi, Anil Kothari, Aakesh Chopra and Ambrish Barsati Pal for flouting various market norms.

It was found that there was failure on the part of the firm to comply with principles of corporate governance and accounting standard leading to a misrepresentation of financial statements.

Among others, the entities failed to "recover the sundry debts and also failed to file any document to substantiate their submission that they rectify the error made by earlier management," Sebi said. PTI.

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