Capital markets regulator Sebi today imposed a penalty totalling Rs 14 lakh on two entities for alleged fraudulent dealing in the shares of Valecha Engineering
Ltd and violating brokers' norm.
In two separate orders, Sebi has slapped a fine of Rs 7 lakh each on Techno Shares and Stock Brokers and Rajesh Pradhan for violating Prohibition of Fraudulent and Unfair Trade Practices regulations and broker norms.
Pradhan, a sub-broker of Techno, was also one of the employees of Valecha Engineering Ltd (VEL), while Techno Shares and Stock Brokers Ltd is a broker.
According to Sebi, Pradhan became a sub-broker of Techno to facilitate company (VEL) related entities to trade in the scrip of firm and create volume in the share.
"I find that the noticee (Pradhan) has executed sham transactions i.E. Cross deals on behalf of some of its clients who were related to VEL and he also failed to exercise due diligence in identifying employee or related entities of VEL who traded in the scrip, thereby violating... PFUTP Regulations ... And also violating... Broker Regulations," Sebi Adjudicating Officer D Sura Reddy said in his order.
Sebi said Techno, by employing Pradhan, an employee of VEL as a sub-broker, who facilitated the company-related entities to trade in the scrip and create artificial volume in the scrip, has indeed 'aided and abetted' the clients and executed sham transactions in the scrip of VEL.
