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Sebi levies over Rs 12 cr fine on Tarini International, officials for flouting market norms

Press Trust of India  |  New Delhi 

Markets regulator Sebi on Monday levied a total fine of Rs 12.05 crore on Tarini International Ltd and its officials for utilising the initial public offering (IPO) proceeds for purposes other than stated in the prospectus.

Additionally, they had also concealed crucial information, such as loan taken from Hind Ispat prior to the IPO, from investors.

Of the total fine levied by Sebi, Rs 5.05 crore have been imposed on the firm, while its managing director Vakamulla Chandra Shekhar and whole-time director Vakamulla Anu Naidu face a fine of Rs 5 crore each for violating various market norms.

The regulator carried out investigation between June 2014 and August 2014 into the IPO of equity shares issued by Tarini International and its subsequent activities related to the trading of shares.

The objectives of the IPO in the prospectus were for meeting long-term working capital requirements and renovation of the registered office, among others. However, the firm did not utilise the proceeds for the mentioned objectives and diverted the funds to the group companies.

Sebi noted that the firm and its officials have misappropriated the proceeds of IPO aggregating to Rs 11.71 crore and transferred it to its group entities.

"It is concluded that the Noticees, by their act, have disturbed the equilibrium of securities market by not disclosing material information to investors and misappropriating IPO proceed for the purpose other than that mentioned in the prospectus," Sebi said.

In March 2019, Sebi had passed directions against the firm and its officials for the same set of violations and had directed the company to recover IPO proceeds aggregating to Rs 11.7 crore and also barred them from securities market for four years from the date of completion of recovery of the diverted funds with interest.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, February 10 2020. 19:50 IST