Ketan Parekh gets three years in jail for violation of SEBI rules
The company challenged the order imposing the penalty before the Securities Appellate Tribunal (SAT). SAT rejected their appeal on January 9, 2007.mumbai Updated: Feb 28, 2018 00:26 IST
The special SEBI court on Tuesday held Panther Fincap and Management Services Ltd and its directors Ketan Parekh and Kartik Parekh guilty of violation of SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 while acquiring shares of Shonkh Technologies International Ltd, sentencing the Parekhs to three years in jail. The firm and the directors have been asked to pay a fine of Rs10 lakh.
While convicting Ketan and his cousin, the court observed that, the two were in charge and responsible for the day-to-day functioning of the company. The court later granted bail to Kartik, as he was out on bail.
According to the prosecution, Panther Fincap and Management Services Ltd acquired shares of Shonkh Technologies International Ltd. During the inquiry, SEBI found the company guilty under regulations 7 and 10 of SEBI (Substantial Acquisition of Shares and Take Over), Regulations, 1997. The provisions refer to acquisition of 5% and more shares or voting rights of a company.
SEBI imposed a fine of Rs6.50 lakh on the company. The company challenged the order imposing the penalty before the Securities Appellate Tribunal (SAT). SAT rejected their appeal on January 9, 2007.
As the company and its directors failed to pay the penalty, SEBI filed a criminal case against the company and its directors -- Kartik Parekh, Navinchandra Parekh, Kirtikumar Parekh and Ketan Parekh. It was contended that the Parekhs approached SEBI to pay the fine, but asked for withdrawal of the case. However, it was not agreed and SEBI opened the case against the accused.
The counsel for SEBI examined the assessment officer who had lodged complaint as a witness and showed the company had defaulted in payment of penalty.
The court found company and two of the directors guilty in the case. The other members have been acquitted.