Sebi slaps fine on 17 firms for faulty practices

The Securities & Exchange Board of India (Sebi) has imposed penalty totalling Rs 24 lakh on 17 entities on charges ranging  from non-disclosure of acquisition of shares to involvement in fraudulent trade practices in dealing with shares of Platinum Corporation Ltd.

Sebi fined Platinum Corporation Promoter and Director Pratik Shah and 14 others Rs 20 lakh jointly for non-disclosure of acquisition of shares of the company.  It also levied penalty of Rs 2 lakh each on Shankarlal M Patel and Lakshya Securities and Credit Holdings Ltd for unfair trade practices.

Sebi had earlier conducted investigations relating to trading in the shares of Platinum Corporation which revealed that the company had issued 2.90 crore shares through preferential allotment of Rs 1 each at a premium of Rs 0.25 per share to seven persons, all related to the company, including Shah in January 2009.

The regulator said they failed to make necessary public announcement to acquire the shares of the company in accordance with existing guidelines.

The Securities & Exchange Board of India said the penalty of Rs 20 lakh would be commensurate with the violations committed by Shah and 14 others.

In two other separate orders, the regulator levied penalty of Rs 2 lakh each on Shankarlal M Patel and Lakshya Securities and Credit Holdings Ltd.

This is for facilitating the promoters of Platinum Corporation and connected parties to sell shares in the market by way of off-market transactions in their demat account by acting as conduit for movement of equities in 2004 and 2005.