SAT upholds fine on Rich Capital & Fin Services, directors
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SAT upholds fine on Rich Capital & Fin Services, directors

Last Updated: Thursday, November 15, 2012, 17:39
 
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 SAT upholds fine on Rich Capital & Fin Services, directors
Mumbai: The Securities Appellate Tribunal (SAT) has upheld Sebi order that imposed penalties on Rich Capital & Financial Services Ltd (RCFL) and its directors for allegedly committing fraud regarding rights issue of shares.

The SAT has upheld the penalty of Rs 1.50 lakh on RCFL and Rs 2.50 lakh fine each on the company's directors -- Rajeev Agarwal, Sanjay Gupta, Shashwat Agarwal and Dhrupesh Shah, a notification said.

The company and its directors did not intimate the BSE about the outcome of its meeting on equity rights issues immediately, as required under the norms.

Further, it was alleged that the entities did not take up the agenda of the rights issue in its meeting.

In its order dated November 14, SAT said by "putting the item of rights issue on the agenda note and informing stock exchange about it, surely creates interest in the investors in the shares of the company".

"And thereafter by not taking up the issue at all and not furnishing any reasons therefor and not informing stock exchange about the outcome of the board meeting... Will fall within the definition of fraud under the regulations."

Further, SAT said it examined a separate matter against Big Brokers House Stocks wherein after a probe in scrip of Rich Capital & Financial Services during the investigation period (March-August 2009), Sebi had held Big Brokers House Stocks guilty of violating the regulations for entering into reversal/circular trades.

SAT said RCFL and the directors are connected to the parties involved in the order passed against Big Brokers House Stocks.

Sebi in its probe said RCFL made corporate announcements relating to financial results and rights issue of equity shares of the company between April-August 2009.

The meeting of the RCFL board of directors to consider rights issue of equity shares, scheduled to be held on August 1, 2009 was postponed to August 10, 2009 which was again adjourned.

As per Sebi, the intimation was furnished only on October 9, 2009 after repeated reminders from BSE.

Sebi alleged that the rights issue of equity shares of the company was never considered and that its board of directors never had an intention to consider rights issue.

PTI



First Published: Thursday, November 15, 2012, 17:39


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