Sebi slaps Rs 5.26 crore penalty in PGEL IPO matter

Sebi today imposed a total fine of Rs 5.26 crore on 31 entities for non-compliance with disclosure norms and other violation regarding the PG Electroplast Ltd's IPO, that happened in 2011.
A fine of Rs 1 crore each has been slapped on the company and its four directors -- Pramod Gupta, Anurag Gupta, Vishal Gupta and Vikas Gupta.
Besides, 26 entities have been fined Rs 1 lakh each, taking the total penalty amount to Rs 5.26 crore.
PGEL's initial public offer (IPO) had closed on September 12, 2011 and the regulator initiated a probe into its share movement within few days of its listing.

In March 2014, Sebi passed an order barring PGEL and its directors from dealing in capital markets and from raising funds for a period of 10 years for allegedly violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practice relating to the Securities Market) Regulations.
The same was challenged at the Securities and Appellate Tribunal (SAT) which reduced the ban period to seven years.

However, among others, the tribunal had upheld the allegations related to non-disclosure of certain agreements whereby the company was to invest the IPO proceeds in inter- corporate deposits of other companies.
In a 99-page order, Sebi said PGEL and the four directors violated ICDR (Issue of Capital and Disclosure Requirements) Regulations.

The regulator also noted that 26 entities failed to provide the information in the case even after summons were delivered to them.