SAT upholds Sebi order against 2 individuals; reduces fine

The Securities Appellate Tribunal (SAT) has upheld Sebi's order against two individuals in a case related to "fraudulent and manipulative" dealings in the shares of Shree Global Tradefin.

However, the tribunal has slashed the total penalty slapped on Krupa Sanjay Soni and Sanjay Soni to Rs 20 lakh from Rs 60 lakh imposed by Sebi.

A probe by Securities and Exchange Board of India (Sebi) had found that Krupa and Sanjay along with other entities had formed a 'group' and had dealt in the scrip Shree Global "in a fraudulent and manipulative manner" in 2009.

In September 2012, Sebi had imposed a fine of Rs 30 lakh each on Krupa and Sanjay following which both had approached the SAT challenging the market regulator's rulings.

In an order dated January 24, SAT said that "the impugned order in case of each appellant (Krupa and Sanjay) is upheld with a modification of the penalty to Rs 10 lakh per appellant ie in all Rs 20 lakh to be paid within a period of two months from the date of receipt of copy of this order...".

SAT observed that a number of shares had been dealt by executing self-trades through several brokers. In addition there was trading of some shares in a synchronised manner.

While not finding any "legal infirmity" in Sebi's order, SAT said that there was no piece of evidence on record to prove that both the individuals had "controlled" the tradings /demat accounts of the members of the so called "group", among others.

"The appellants' nexus with the trades of the group entities has not been, therefore, established," SAT said.

"Moreover, no action has been taken against the persons who acted as a group along with appellants," it added.

Probe carried out by Sebi revealed that Shree Global share price recorded a jump of 31.77 per cent in 163 trading days between March 23 and November 20, 2009.