Appellate Tribunal halves penalty against accused in IPO scam | mumbai | Hindustan Times
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Appellate Tribunal halves penalty against accused in IPO scam

mumbai Updated: Jul 06, 2010 15:34 IST

The Securities and Appellate Tribunal (SAT) has halved the penalty imposed on Bhanuprasad D Trivedi, an accused in the multi-crore IPO scam that had hit the capital markets during 2003-05, to Rs 2 crore.

"Having a regard to the facts and circumstances of the case and taking note of the gravity of the wrong-doings of the appellant, we are of the view that the ends of justice would be adequately met if the amount of penalty imposed on him is reduced to Rs 2 crore," the appellate authority said in its ruling while dismissing an appeal by Trivedi against the order of market regulator SEBI.

In March, SEBI found that Trivedi had made an "unlawful gain" of Rs 3.36 crore and Rs 27.50 lakh while dealing with shares of two companies - IDFC and Sasken - and imposed a fine of Rs 4 crore on him.

The penalty was imposed on him for violating various regulations. Trivedi later filed an appeal against the SEBI's order with the SAT.

Trivedi was held guilty of acting in league with one Roopal Panchal and allowing her to use his bank and demat accounts for the sale and purchase of equity. He was also accused of making crores of rupees in off-market equity deals.

He reportedly purchased 11 lakh shares of IDFC at an issue price of Rs 34 per share in off-market transactions and sold them later at a higher price, making an unlawful profit of Rs 3.54 crore.

In the Sasken IPO case, Trivedi received 14,275 shares from three operators and later sold them in the market through a broker at a higher price.

In both instances, he worked in concert with Panchal and Khandwala Integrated Financial Services Pvt Ltd.

Giving its verdict, SAT said that Trivedi mainly allowed his bank account and demat account to be used by Panchal and Khandwala Integrated Financial Services and "there was no visible gain to the appellant..."

It further added that though Trivedi had not made any disproportionate gain from the transactions, he was involved in the wrong-doing.

During the IPO scam in 2003-05, stock brokers opened multiple bank and demat accounts to corner shares meant for retail investors.