Dhaval Mehta, the brain behind the IPO scam in companies like Suzlon Energy and IDFC, today agreed in the Supreme Court to deposit Rs 1 crore penalty imposed on him by market regulator the Securities and Exchange Board of India (Sebi).

Counsels appearing for Mehta, whose alleged role in the scam shook the market in 2006, informed a bench headed by the Chief Justice that following its direction he would submit Rs 1 crore penalty imposed by it.

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Mehta has challenged the order of Securities Appellate Tribunal, which upheld Sebi's decision.

The Sebi had barred Mehta after it found that he, along with a non-banking company Ashmi Financial Consultancy, had booked shares in the IPOs of Suzlon Energy and IDFC through fictitious demat accounts in the names of friends and relatives sharing common addresses.

The market regulator had on October 21, 2008 held Mehta guilty of violating Sebi (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 as well as Disclosure and Investor Protection Guidelines.

The regulator had found that Mehta and Ashmi had earned about Rs 1.44 crore from 3,870 and 719 applications in IPOs of Suzlon and IDFC respectively, depriving retail individual investors from getting shares.

It had also asked Mehta to pay Rs 72 lakhs along with 10 per cent interest from August 12, 2008, the date of listing of IDFC IPO, till the date of actual disgorgement within 45 days of the passing of the order.

According to the Sebi's findings, Mehta along with the firm had opened various demat accounts in fictitious and benami names and had filed large number of applications in IPOs.

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