Mumbai: The special SEBI court has sentenced a businessman from Walkeshwar, Ketan Shah, to one-month imprisonment for failing to pay the penalty of Rs 5 lakh imposed by the SEBI board for violating trading rules. The court has also asked Shah to pay a fine of Rs 10 lakh. However, the court suspended the sentence on Shah paying the fine amount of Rs 25,000 and promising to deposit the rest of the amount in the next 30 days.
The court said that out of the total fine amount, Rs 5 lakh be given to SEBI. As per the prosecution case, SEBI investigated the trading of the shares of Spectacle Infotech Ltd (SIL) during the period May 1, 2010 to January 31, 2011 and found that the price of company’s scrip unusually increased from Rs21.75 to Rs162.80, with daily high and low traded volume being 31 to 79,68,043 shares.
The investigation revealed that certain entities, including the accused, were connected to each other in some way and had dealt in the SIL scrip through multiple brokers. The adjudicating officer conducted the inquiry and imposed a penalty of Rs5 lakh on Shah by an order dated December 22, 2014.
It is alleged that Shah failed to pay the penalty and filed an appeal challenging the SEBI order before the Securities Appellate Tribunal (SAT), which too rejected on December 15, 2016. It was contended that SAT, while disposing of his appeal, had allowed him three months to deposit the fine amount. However, he failed, following which SEBI initiated criminal proceedings. The court held that Shah failed to deposit the penalty within the stipulated period of three months.
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