Market regulator Sebi has suspended the broker registration of Baba Bhoothnath Trade and Commerce for a period of 15 days in a case related to fraudulent dealings in initial public offer (IPO) of Taksheel Solutions.
Baba Bhoothnath is a registered broker with BSE and NSE.
As per Sebi, Baba Bhoothnath has allegedly violated regulations on 'prohibition of fraudulent and unfair trade practices' as well as norms for stock brokers by trading in Taksheel's shares using IPO funds of the company that it had received through a circuitous route.
Taking into account, among others, that the broker had already suffered a restraint of two years for its dealings in the scrip of Taksheel, Sebi in an order dated December 31 said that "the suspension of certificate of registration of the noticee (Baba Bhoothnath) for a period of 15 days would be commensurate with the violations found in the matter".
The suspension will come into force on expiry of 21 days from the date of the order, Sebi said.
Taksheel Solutions had come out with an IPO during the period September 29 - October 4, 2011.
Sebi probe into the matter had found that Taksheel Solutions through layered transactions, diverted a part of the IPO proceeds in a circuitous route to certain entities including Baba Bhoothnath.
As per the market watchdog, Baba Bhoothnath had received a part of Taksheel's IPO proceeds through another entity to trade in the shares of the company on the day of listing.
In this regard, Sebi in December 2011 had also prohibited Baba Bhoothnath from the securities market, till further directions.