Sebi slaps Rs 76 crore penalty on Taksheel, 15 others

In one of the largest penalties imposed by Sebi in recent times, the market regulator today slapped Rs 76 crore cumulative fines on Taksheel Solutions and 15 other entities, including the firm's promoters, in a case related to alleged irregularities in the company's IPO.
The Sebi has found that Taksheel Solutions had suppressed vital information and had made factually incorrect statements in its IPO prospectus which was highly misleading to the investing public.
Moreover, the probe found that Taksheel had siphoned off the IPO proceeds as well as diverted the IPO proceeds through different entities like Rose Valley Merchandise and Overall Financial Consultants to deal in the shares of the company on its listing day.

Accordingly, the Securities and Exchange Board of India (Sebi) in a 100-page order today, has imposed Rs 26 crore fine on Taksheel Solutions and Rs 11 crore each on its promoters -- Pavan Kumar Kuchana and Ramaswamy Kuchana.
It has also imposed Rs 6 crore each on Rose Valley Merchandise and Overall Financial Consultants as well as Rs 1 crore each on their respective directors. Other entities have been slapped penalties in range of Rs 1-2 crore.
"The...Fraudulent activity reflects the opaqueness with which the entire IPO has been carried out by noticee no 1 (Taksheel Solutions) and its promoter-directors clearly exhibits the web of deceit and conspiracy hatched by the entities," the Sebi said in the order.

The Sebi investigation has found that a total amount of Rs 48.34 crore, amounting to 60.05 per cent of the IPO proceeds, were utilised for purposes other than the disclosed objects in the offer documents.

Taksheel Solutions Ltd (TSL) had come out with an IPO of 55 lakh shares which opened for public subscription during September 29, 2011 to October 4, 2011.
The company had raised Rs 82.50 crore through issuance of 55 lakh shares of which Rs 80.50 crore were transferred to TSL's bank account maintained with Indian Bank.
The trading in Taksheel shares commenced on October 19, 2011 and witnessed major fluctuation in the price during the first day of its listing.

In a separate IPO case, Sebi today imposed a penalty of Rs 10 lakh on AKG Securities and Consultancy for indulging in fictitious self trades in shares of Onelife Capital Advisors Ltd (OCAL) on the firm's listing day on stock exchanges as well as few days thereafter.
Noting that AKG Securities had indulged in self trades that "created a misleading appearance of trading in the scrip and added artificial volume" Sebi has imposed "a penalty of Rs 10 lakh" on the entity.
Self trades are those trades where the buyer and the seller are the same entities and which do not result in change of beneficial ownership. Such trades are fictitious in nature as they create artificial volume in the scrip.

OCAL had come out with an IPO and its share were listed on NSE and BSE on October 17, 2011.