Sebi imposes Rs 50 lakh fine on two persons for fraudulent trade

Markets watchdog Sebi on Thursday levied a total fine of Rs 50 lakh on two individuals for fraudulent trade in the scrip of Zodiac Ventures.

Sebi conducted an investigation for the period between October 2013 and December 2014 regarding trades carried out in the scrip of the firm.

The probe found that the individuals -- Kalpana Dharmesh Chheda and Utkarsh Dharmesh Chheda -- indulged in several trades with small volumes at prices above the last traded price (LTP). This led to creation of misleading appearance of trading and manipulated the price of the scrip, resulting in higher price with each trade.

"The trades executed by the Noticees were fraudulent, manipulative and designed to inflate the scrip price to sell at a later opportune time and make wrongful gains," Sebi said in an order.

By carrying out such trades, the individuals have violated provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms, it said.

Accordingly, the regulator levied a fine of Rs 45 lakh on Kalpana Dharmesh Chheda and Rs 5 lakh on Utkarsh Dharmesh Chheda.

In a separate order, Sebi slapped a total fine of Rs 7 lakh on the investment advisor of CIG Realty Fund, Unitech Advisors and five individuals for violating Venture Capital Fund (VCF) norms.

During a probe, Sebi found that tenure of two of the three schemes launched by CIG had already expired and none of the schemes had been liquidated. Also, tenure of the two schemes was extended beyond the permissible tenure.

It also observed that "out of investment worth approx. Rs 649 crore made by CIG across all three schemes, CIG has not divested any of the investments".

Consequently, it imposed a fine of Rs 2 lakh on Unitech Advisors and Rs 1 lakh each on the trustees of the scheme -- S K Misra, Anil Harish, Rakesh Dhingra, Mahesh Kumar Sharma and Vijay Tulshyan.