Capital markets regulator Sebi has imposed a total penalty of Rs 10.65 crore on Bhoruka Aluminium Ltd and its officials in a matter related to manipulation in issuance of global depository receipts (GDR).
The regulator in a probe conducted between November-December 2010 noted that the firm had issued 1.12 million GDRs amounting to $10.38 million (around Rs 74 crore) and the entire GDR issue was subscribed by only one entity, Vintage FZE.
It was observed that the subscription amount was paid by Vintage on obtaining a loan from European American Investment (EURAM) Bank.
Besides, the loan paid by Vintage was secured by pledge agreement between Bhoruka Aluminium and EURAM Bank.
Sebi noted that GDR issue would not have been subscribed if the firm had not given such security towards the loan taken by Vintage.
It further found that the firm made false and misleading corporate announcements and suppressed the material and price sensitive informations.
Sebi said the scheme of arrangement of the firm was fraudulent and was to "influence the decision of the investors and to induce the sale or purchase of its scrip."
For violating various norms, Sebi imposed a total fine of Rs 10.15 crore on the firm while its officials--M K Panduranga Shetty, Rajkumar Agarwal and Rajat Agarwal have been fined Rs 10 lakh each and Ajay Kumar Dalmia faces a penalty of Rs 20 lakh.
In separate orders, Sebi imposed a total fine of Rs 22.3 lakh on three entities for executing reversal trade in the illiquid stock options segment on the BSE.
The orders follow a probe conducted by Sebi in the stock options segment from April 2014 to September 2015 after it observed large scale reversal of trades that led to creation of artificial volume.
Sebi noted that the firms violated the provisions of the Prohibition of Fraudulent and Unfair Trade Practices norms.
Of the total penalty levied on the entities, Rs 17.3 lakh was on Eveningstar Dealtrade and Rs 5 lakh each was on Delta International and Dipen D Chandruva HUF.