Sebi slaps Rs 4 lakh fine on 2 entities in Sanjay Dangi case

Sebi has slapped Rs 4 lakh fine on two entities Shentracon Trexim and Sidhant Financial Services in two separate orders issued yesterday for not providing information to the market regulator during its probe in share price manipulation by Sanjay Dangi and associates.

For conducting a thorough probe in determining the exact role played by the Dangi and associated entities details were sought from Shentracon and Sidhant by the Sebi's Investigating Authority (IA), it said.

However, Shentracon and Sidhant did not furnish complete details regarding their business/financial dealings with certain entities involved in the probe, among others, as sought by the regulator, it added.

"Not submitting complete details/information to the summonses appears to be a deliberate action on the part of the noticee to not cooperate with the regulatory mechanism, especially when sufficient opportunity was provided," Sebi said in two similarly worded orders.

The regulator also noted that "such non cooperation and default" is an impediment to the investigation process and is detrimental to the interest of investors in securities market.

Sebi had passed an interim order in December 2010 banning Dangi, his associates and promoters of four companies Murli Industries, Hubtown Ltd, Welspun Gujarat Stahl Rohren and Brushman.

The order was based on a preliminary probe which had found a well-planned strategy to manipulate the share price of the company before the issuance of the Foreign Currency Convertible Bond (FCCBs).

It was prima facie observed in the interim order that the Dangi group along with the promoters of various companies had indulged in fraudulent and unfair trade practices relating to securities market, among others, Sebi said.