It was found that three individuals had bought shares of the company on February 11, 2009, and failed to fulfill their respective pay-in obligations.
Besides, certain other individuals had entered into the sham transactions with the defaulting clients who were related to them and aided the defaulting clients in prejudicing the integrity of the securities market.
Defaulting clients are Mukesh G Konde, Nitesh Ashok Jadhav and Ashok Narayan Waje.
Further, it was observed that the cheques which were given to the stock brokers by Konde, Jadhav and Waje as initial margin money were dishonored due to insufficiency of funds in their respective accounts.
These entities had entered into transactions with related persons/entities with mala fide intentions of not fulfilling the pay-in obligations with respect to their trades on February 11, 2009, and had put the entire stock exchange mechanism at risk, the regulator said.
They were able to fulfill their obligations towards the initial margin money only after receiving funds from Om Associates and Bhawani Trading.
The act of financing undertaken by Om Associates and Bhawani Trading company was in the manner of aiding and abetting the other six entities in the latter’s fraudulent activities, Sebi said.
“Seen as a whole, the conduct of all the Noticees in their transactions was found to be fraudulent/ non-genuine and, thereafter, their approach towards the investigation of Sebi is found to be far from satisfactory, casual and evasive,” Sebi said.
For violating market norms, Sebi levied fine in the range of Rs 5 lakh each to Rs 20 lakh each on the entities.
As per a separate order, Sebi cancelled certificate of registration of stock broker Moongipa Investments Ltd.
Investigation was initiated as Sebi received 16 complaints against the stock broker through the Sebi Complaints Redressal System platform between July 11 to July 23, 2015.
It violated several market norms and failed to comply with several circulars of the regulator.
It not only failed to segregate own funds and securities from the clients’ funds and securities as mandated under Sebi circulars, but also misappropriated client funds and securities for meeting its own payment obligations, Sebi said.
The stock broker was also found to be engaging in activity or business involving personal financial liability, other than stock broking business.
It was not settling the accounts of its clients periodically and also failed to satisfactorily redress investor grievances, Sebi noted.
