SAT upholds Sebi's order on 5 entities, a broker; reduces fine

The Securities Appellate Tribunal (SAT) has upheld Sebi's order against five individuals related to fraudulent trading in shares of Popular Estate Management but has halved the fine slapped on them from Rs 8.50 lakh to Rs 4.25 lakh.

In a separate order, SAT has also slashed the penalty on sub-broker Crystal Finstock which had executed trades on behalf of the five individuals from Rs 2 lakh to Rs 1 lakh.

In October, 2012, Sebi had imposed total penalty of Rs 8.50 lakh on Ramkishore Maheshwari, Bhanwarlal Maheshwari, Nilesh D Patel, Renu Maheshwari and Nimbaram D Prajapati for indulging in synchronised reversal trades in Popular Estate Management shares.

"We do not find any good ground to interfere with the impugned order and the same is hereby upheld," SAT said in its order dated June 26.

However the tribunal said it is "inclined to reduce the penalty imposed on the appellants to 50% that is from Rs 8,50,000 to Rs 4,25,000 in the interest of justice,"

The five entities had executed the trades through their sub-broker Crystal Finstock which was also penalised by Sebi for fraudulent trading and violations of stock broker norms.

"Keeping in view the totality of the facts and circumstances of the case we are inclined to reduce the penalty to Rs 1 lakh," SAT said in its order against Crystal Finstock while upholding Sebi's order against the broker.

The case relates to a probe conducted by Sebi in respect of trading in the shares of Popular Estate Management during the period from February 9, 2009 to February 24, 2009.

Investigations revealed that Ramkishore Maheshwari and the other four were connected to each other and had traded through sub-broker Crystal Finstock had executed trades among themselves.