Sebi slaps Rs 1 cr fine on individual for not following orders

He is accused of making through unlawful gains in IPOs of Suzlon and IDFC

Sebi has imposed a penalty of Rs 1 crore on one Dhaval A Mehta for failing to comply with its directive to pay the amount allegedly made through unlawful gains in IPOs of Suzlon and IDFC.

In October 2008, Securities and Exchange Board of India (Sebi) had directed Mehta to disgorge the unlawful gains of Rs 72 lakh made from Initial Public Offer (IPO) of Suzlon and IDFC. The amount was to be paid to the regulator within 45 days and also included the interest.

Additionally, the regulator has restrained Mehta from dealing in the securities market for a period of two years.

"After taking into consideration all the facts and circumstances of the case, I impose a penalty of Rs 1 crore ...For his failure to comply with the directions issued by Sebi vide order dated October 31, 2008," Sebi's adjudicating officer Barnali Mukherjee said in an order issued yesterday.

In its earlier order, the regulator had ruled that Mehta was the mastermind in the manipulation of retail segment of the Suzlon and IDFC IPOs.

"He manipulated the demand for shares in the retail category and thereby distorted market integrity. He deprived retail individual investors of their legitimate shares in the Suzlon and IDFC IPOs and made an unlawful gain of Rs 72 lakh," Sebi had noted.

Following Sebi's order, Mehta had approached the Securities and Appellate Tribunal (SAT) which had dismissed his appeal in 2009.

Thereafter, Mehta had approached the Supreme Court which also set aside his appeal last year.