Sebi settles Adani Exports scrip case with 5 individuals of erstwhile Investmart India Ltd

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New Delhi | Updated: February 17, 2017 8:55:57 PM

Markets regulator Sebi has settled a case with five individuals of erstwhile Investmart India Ltd regarding alleged manipulation in the scrip of Adani Exports more than 16 years ago.

All the five had filed separate applications seeking to settle, without admitting or denying the findings of fact and conclusions of law, the pending enquiry proceedings initiated against them. (Reuters)All the five had filed separate applications seeking to settle, without admitting or denying the findings of fact and conclusions of law, the pending enquiry proceedings initiated against them. (Reuters)

Markets regulator Sebi has settled a case with five individuals of erstwhile Investmart India Ltd regarding alleged manipulation in the scrip of Adani Exports more than 16 years ago. The five individuals paid a total of around Rs 1.10 crore towards settlement fee to the regulator. An investigation by Sebi into the dealings in shares of Adani Exports Ltd (AEL) from January 1999 to February 2001 allegedly found irregularities. Among others, it was alleged that Investmart India Ltd had executed synchronised/structured and cross trades that led to manipulation in volume and price of the shares. Investmart India Ltd (IIL) was later known as IL&FS Investmart Securities Ltd and currently is HSBC InvestDirect Securities (India) Ltd — a broker registered with Sebi. Later, the watchdog issued showcause notices to the five individuals who were officials with IIL at the relevant time. The then chairman Ravi Parthasarathy and managing director Hemang Raja paid Rs 34,42,500 each as settlement fee. Three other then directors — Vimal Bhandari, Arun Kumar Saha and Vibhav Kapoor — paid Rs 13,77,000 individually.

All the five had filed separate applications seeking to settle, without admitting or denying the findings of fact and conclusions of law, the pending enquiry proceedings initiated against them.

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In a recent order, the regulator said the proceedings are disposed of as part of the settlement. Sebi’s High Powered Advisory Committee (HPAC) recommended that the matter may be settled on the payment of the amount offered. This was also approved by the panel of whole-time members of Sebi, following which the individuals remitted the amount.

The enquiry proceedings were initiated for alleged violation of Sebi PFUTP (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995. According to the order, enforcement actions, including commencing or reopening of the proceedings, could be initiated if any representation made by the firm is found to be untrue.

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