Sebi slaps Rs 2 lakh fine on entity for submitting misleading documents

Markets watchdog Sebi has imposed a fine of Rs 2 lakh on Siddarth Businesses Ltd, currently known as Shivamshree Businesses Ltd, for submitting incorrect and misleading documents with respect to pre-clearance of trades.

During an investigation, through summons dated January 17, 2018, Siddarth Business (noticee) was asked to provide details of pre-clearance obtained by all directors and the code of conduct to regulate, monitor and report trading by insiders adopted by the company.

Subsequently, documents were submitted to the regulator. However, Sebi found that they were incorrect and misleading.

"On the basis of facts and circumstances of the case, the only conclusion that can be drawn in the matter is that the pre-clearance obtained by the directors was not correct as it was not approved by the then compliance officer of the noticee but by erstwhile compliance officer.

"The erstwhile compliance officer had signed the forms after the date of his resignation from the company. Thus, the documents submitted by the noticee during the investigation was incorrect and misleading," Sebi said in an order dated August 11.

The watchdog noted that after taking into account the facts and circumstances of the case, furnishing incorrect or misleading information amounted to failure to furnish the information sought.

According to the order, there is no material made available on record to assess the amount of loss caused to investors or the amount of disproportionate gain or unfair advantage made by the noticee as a result of default but submitting incorrect and misleading documents before the investigating authority hampers the investigation.

Imposing the Rs 2 lakh fine, Sebi also said any hurdle in the investigation due to non-cooperation by any entity is detrimental to the interest of investors in the securities market and the same deserves to be viewed seriously.