SAT sets aside fine on one individual in Axon Infotech case

Sebi in Sept 2012, had slapped fine on Dhirendra Rajitram Shukla violating norms on fraudulent trading practices, with regard to trading of Axon

The Securities Appellate Tribunal (SAT) today set aside capital market regulator Sebi's order that imposed a penalty of Rs 40 lakh on one Dhirendra Rajitram Shukla for alleged violations in trading norms related to shares of Axon Infotech.

The Securities and Exchange Board of India (Sebi), in September 2012, had slapped the fine on Shukla for violating norms on fraudulent trading practices, with regard to trading of Axon (earlier known as Aesthetic Investments) shares.

"In the circumstances, the impugned order cannot be upheld and hence quashed," the Tribunal said in its order.

"This Tribunal has not been able to appreciate and hence accept the conclusions that scrip of Axon) was manipulated by appellant (Shukla)and did harm to alarge number of investors, who are not more than 26 in all," SAT added.

Pursuant to the amalgamation scheme of Kushal Software with Axon, BSE had suo moto initiated investigation into the shares of Axon for suspected violation of price manipulation, insider trading, takeover code and technical violations for the period from March 17, 2006 to September 19, 2006.

Following the BSE report on the issue, Sebi initiated a probe in the scrip of Axon for suspected violations of price manipulation, insider trading, takeover code and technical violations.

The market regulator had found that Shukla manipulated the price of Axon which distorted market equilibrium of the scrip.