Sebi slaps Rs 10 lakh fine on Gold Multifab promoter

Sebi today imposed a penalty of Rs 10 lakh on Gold Multifab's promoter Vivek Bhatia for not complying with the regulator's direction to provide an exit opportunity to the firm's shareholders post its IPO.
Following allegations of irregularities with regard to allotment of shares and utilisation of money received in the initial public offer (IPO) of Gold Multifab Ltd (GML), among others, the Securities and Exchange Board of India (Sebi) conducted an investigation to ascertain the extent and nature of the same.
After the probe, Sebi through an order dated October 11, 2002, had directed Vivek Bhatia to ask all the existing shareholders whether they would like to remain invested with the company and if not, then give them an option to sell the shares to the promoter.

The regulator had also prohibited GML from accessing the capital markets for a period of three years and debarred the firm's directors from dealing in securities for the same duration.
In its fresh order, Sebi said Vivek Bhatia, being the sole promoter of GML, by not providing exit opportunity to the existing shareholders of the firm, has not complied with the directions.
Sebi also noted that Priti Bhatia, a director of GML, had traded during the prohibition period.
"... Vivek (as a promoter) for not providing exit option and Priti being a director traded during the debarred period, are non-compliant of the directions of Sebi order dated October 11, 2002 and are liable for monetary penalty," the regulator said.

Accordingly, Sebi imposed a penalty of Rs 10 lakh on Vivek Bhatia and Rs 1 lakh on Priti Bhatia.