Sebi ban Brooks Lab, top executives from capital mkts for 5-yr

Sebi today barred Brooks Laboratories and its top executives from the securities markets for five years for siphoning off funds and concealing of material information in its IPO documents.
Apart from Brooks, prohibitory order has been passed against its chairman Atul Ranchal, Managing Director Rajesh Mahajan, chief executive Durga Shankar Maity, chief financial officer Ketan Shah and company secretary Parvinder Kaur.
In a 42-page order, Sebi said they have been "prohibited from raising any further capital from the securities market, in any manner whatsoever, for a period of five years."
It further said that prohibition already undergone by Brooks, its directors and officers pursuant to the interim order dated December 28, 2011 "shall be taken into account for the purpose of computing the period of prohibition imposed in this order."

"Fraudulent acts of siphoning off funds and the non disclosure or concealment of material information viz, raising of ICDs (Inter Corporate Deposits), appointment of Suryamukhi as project contractor and paying entire amount to Suryamukhi as an advance, appointment of Neo Power as the supplier of the machinery and making an advance payment of Rs 13.97 crore to Neo Power were concealed from the investors,
"Such concealment of material information does not amount to true, fair and adequate disclosures by noticees (Brooks and its top executives. This concealment is rather fraudulent in nature, depriving the investors the chance to take an informed investment decision," Sebi said.

Further, the regulator said that these entities not only failed to make true, fair and adequate disclosures, they also made deliberately wrong disclosures in the offer document."

Besides, Sebi has allowed Brooks to utilise the funds lying in the escrow account for the objects disclosed in the draft papers.
The Securities and Exchange Board of India, through an interim order in December 2011, had barred the company and its top five executives "from accessing the securities market and further prohibited it from buying, selling or dealing in securities market, directly or indirectly till further orders."
In a separate order, Sebi has slapped a fine of Rs 15 lakh on Nikhil Securities and Rs 10 lakh on Genuine Stock Brokers for violating capital markets norm in the case of Readymade Steel India's IPO.

Nikhil Securities had executed self-trades (i.E. Same buy client as well as the sale client for a given trade resulting in no change of beneficial ownership) in the shares of Readymade Steel India (now know as Kridhan Infra) through stock broker Genuine Stock Brokers.
By indulging in such activities, Nikhil Securities has violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulation, while Genuine Stock Brokerers has non-complied with code of conduct for prescribed stock brokers.