Sebi imposes Rs 15 lakh fine on 3 entities in Ravi Kumar Distilleries case

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New Delhi | Updated: July 26, 2018 6:32:41 PM

Markets regulator Sebi has imposed a fine of Rs 15 lakh on three entities for failing to submit information in a case related to IPO of Ravi Kumar Distilleries Ltd (RKDL).

Securities and Exchange Board of India (Sebi) imposed a penalty of Rs 5 lakh each on Everready Marketing Pvt Ltd, Udaybhai Prabhudas Shah and S5 Trading Pvt Ltd. (Reuters)

Markets regulator Sebi has imposed a fine of Rs 15 lakh on three entities for failing to submit information in a case related to IPO of Ravi Kumar Distilleries Ltd (RKDL).

In three separate orders, the Securities and Exchange Board of India (Sebi) imposed a penalty of Rs 5 lakh each on Everready Marketing Pvt Ltd, Udaybhai Prabhudas Shah and S5 Trading Pvt Ltd.

It was alleged in the investigation report that RKDL along with other connected entities which also includes these three entities had siphoned of the IPO (Initial Public Offering) proceeds of RKDL to the tune of Rs 33.83 crores and the information regarding alleged siphoning was sought by the investigating authority from the noticees (Everready Marketing, Udaybhai Shah and S5 Trading) through the summons in January 2014 and June 2014.

Through two summons issued in 2014, the regulator had sought information including details of trading carried out by these entities, information regarding receipt of Rs 1 crore each by the entities and subsequent transfer of same amount to their respective stock brokers on the same day to trade in shares of RKDL on the first day of its listing.

However, they failed to submit information and documents sought by the investigating authority (IA) and thereby violated Sebi norms, the regulator said in an order dated June, 29 2018.

“The information sought from the noticees vide summons dated January 29, 2014 and June 4, 2014 was very relevant and important in unearthing the truth to protect the interest of the investors and punish the manipulators associated with the IPO of RKDL. The failure of the noticees to comply with the two summons issued by the IA has clearly hampered the investigation process”, said adjudicating officer Suresh B Menon in a similarly worded orders.

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