Sebi imposes Rs 2 crore fine on 4 entities in Vaswani IPO case

Capital market regulator Sebi today imposed a total penalty of Rs 2 crore on four entities for artificially inflating bid prices in the initial public offer (IPO) of Vaswani Industries in 2011.
The Securities and Exchange Board of India (Sebi) levied fines of Rs 75 lakh on Rikhav Brokers, Rs 25 lakh on AHL Investment Consultants and Rs 50 lakh each on Manba Broking Services and Manba Investments & Securities, the regulator said in an order today.
Sebi found the entities made bids in the company's IPO at the upper end of the price band through their sub-syndicate members and subsequently withdrew the bids because cheques were returned or not banked.

Sebi noted the bids were made by the entities without sufficient funds and "were definitely not genuine, but were caused with purpose to artificially inflate the bid book at the highest price and to create misleading interest for other investors to subscribe in the issue."
The bidding for the issue opened on April 29, 2011, and closed on May 3, 2011.