Sebi slaps Rs 22 lakh fine on stock broker in SKS Logistics case

Markets regulator Sebi today slapped a fine of Rs 22 lakh on stock broker P J Chaudhary for indulging in fraudulent trading in the shares of SKS Logistics as well as violating broker norms.

The regulator had conducted an investigation into the alleged irregularity in the trading in the shares of SKS Logistics and into the possible violations of Sebi norms.

Sebi said it found that Chaudhary had indulged in circular or synchronized trading in connivance with certain clients and was instrumental in creating artificial volume in the scrip which distorted market equilibrium.

It also said Chaudhary had failed to "exercise due skill, care and diligence and not maintained high standard of integrity, promptitude, fairness in the conduct of its business as a stock broker".

By indulging in such activities, he violated PFTUP (Prohibition of Fraudulent and Unfair trade Practices) as well as stock broker norms and accordingly, Securities and Exchange Board of India (Sebi) has imposed a fine of Rs 22 lakh on him.

In a separate order, Sebi has levied a penalty totalling Rs 25 lakh on two entities - Anurag Agarwal and Paksh Developers Pvt Ltd - for not complying with the markets regulator's orders, that had directed them to make a public announcement to acquire shares of Sterling Green Woods Ltd (SGWL).

The regulator in July 2016 had asked them to make public announcement to acquire shares of SGWL under the provisions of SAST (Substantial Acquisition of Shares and Takeovers) norms within 45 days.

Besides, they were directed to pay the applicable consideration along with a 10 per cent annual interest "from December 26, 2007 to the date of payment of consideration to the shareholders who were holding shares in the target company on the date of violation and whose shares are accepted in the open offer, after adjustment of dividend paid, if any".

Again, Sebi in September 2016 had directed them to comply with the directions issued in July 2016 immediately. However, the two entities did not comply with the capital markets watchdog's directions.

"I am of the view that the noticees (Agarwal and Paksh Developers are liable for monetary penalty for their failure to comply with the directions ....issued by whole time member of Sebi vide order dated July 5, 2016 read with order dated September 26, 2016," Sebi Adjudicating Officer Sangeetha Rathod said in an order dated May 31.