Sebi slaps Rs 1.5 crore fine on Moryo Industries, 2 others for fraudulent trade

Capital markets regulator Sebi on Wednesday imposed a total penalty of Rs 1.5 crore on Moryo Industries Ltd and two other entities for not utilising the preferential allotment proceeds as per the objects of issue.

In three separate orders, Sebi levied a fine of Rs 1 crore on Moryo Industries and Rs 25 lakh each on Manoharlal Saraf and Geeta Manoharlal Saraf.

Sebi had conducted an investigation into the trading activities of certain entities in the scrip of Moryo Industries Ltd (MIL) between January 2013 and August 2014.

The regulator found that the company raised Rs 15 crore by issuing shares on preferential basis, and had not utilised the proceeds of the issue as mentioned in the notice of the EOGM (Extra Ordinary General Meeting).

Meanwhile, Manoharlal Saraf and Geeta Manoharlal Saraf, while acting as managing director and independent non-executive director of MIL, respectively, were the signatories to the financial statements declared by the company in its annual report for 2012-13 and 2013-14.

It was further revealed that the company had made investments in shares and given loans and advances, which were not disclosed as the objects of the preferential issue in the notice of the EOGM, Sebi noted.

Thus, the objects of the issue as presented to shareholders or public in the notice of the EOGM of the members of the company was not true and have misled the investors, it added.

By doing so, they have violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.

Meanwhile, in two separate orders, the regulator imposed fine of Rs 5 lakh and Rs 3 lakh on Satish Korogappa Shetty and Narayan Acharya, respectively, in the case of Alexander Stamps and Coin Ltd.

Sebi said Shetty delayed in making disclosures with regard to share transaction and thereby failed to comply with the provisions of PIT (Prohibition of Insider Trading).

On the other hand, Acharya, while acting as a director of the company, was responsible for framing and implementing the Code of Conduct under PIT Regulations, but he failed to do so, it said.

Acharya also failed to make timely disclosures pertaining to share transactions to the company and the exchange, thereby violating PIT norms.