SEBI Slaps Rs 51 Lakh Penalties on 18 Entities in ATL Case

New Delhi, Mar 31: Sebi on Thursday imposed penalties totalling Rs 51 lakh on 18 entities, including individuals, for misutilisation of IPO funds and certain other lapses with respect to the shares of Acropetal Technologies Ltd (ATL).

ATL raised Rs 170 crore through an initial public offering (IPO) in February 2011. Sebi initiated a preliminary investigation into the company's IPO in February 2012 and later an extensive probe was conducted to ascertain whether there were any violations of regulations.

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The probe, which included several entities, revealed a prima facie non-utilisation of IPO proceeds, deviation from the objects of the issue, wrong disclosures made to NSE and BSE regarding the proceeds' utilisation and non-disclosure of material information, among others. The investigation was concluded and the action was approved by the competent authority on March 27, 2017.

According to a 136-page order, Sebi said that ATL, its Chairman and Managing Director Ravi Kumar Doraiswamy are liable for imposition of penalties totalling Rs 15 lakh.

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Further, the company has been slapped with a separate fine of Rs 2 lakh for providing wrong quarterly disclosures to NSE and BSE regarding utilisation of IPO proceeds.

Eleven entities have been slapped with a fine of Rs 2 lakh each for "acting hand-in glove with ATL and were party to the actions and deeds of ATL to divert the IPO money and not deploying the IPO proceeds for stated objects of issue as disclosed in the prospectus of ATL".

As per the order, three other individuals have to pay a fine of Rs 2 lakh each.

Besides, a penalty of Rs 1 lakh each on two other individuals.

According to Sebi, additional penalties are being imposed on four entities to the tune of Rs 1 lakh.

In a separate order, Sebi has imposed a fine of Rs 85 lakh on an individual for alleged manipulations in the shares of Gujarat Arth Ltd.

The case pertains to alleged irregularity in the trading in the shares of Gujarat Arth Ltd for the period from October 6, 2003 to January 28, 2004.

In October 2017, the Securities Appellate Tribunal had aside the adjudication order dated February 9, 2015 against Right Finstock Pvt Ltd and remanded the case for passing a fresh order.

The individual -- Vishnubhai Sunderlal Parekh, who was a director of Right Finstock -- was found to have violated various regulations. He has been slapeed with a fine totalling Rs 85 lakh.

"... penalty imposed on Right Finstock Pvt Ltd vide order dated April 02, 2009 for violation of SEBI (PFUTP) regulations, SAST Regulations and Insider Trading regulations should be imposed on noticee-2 as the director of Right Finstock Pvt Ltd since Right Finstock Pvt Ltd (was) struck-off from the RoC list and also 'dissolved' as on October 25, 2017 as per the RoC notification," the order said.

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