SEBI, the market regulator, ordered 20 entities to disgorge a total of Rs 3.3 crore for violating market norms on Friday.
SEBI received a Suspicious Transaction Report ("STR") from the Financial Intelligence Unit ("FIU") on December 21, 2012, generated by ICICI Bank, regarding high-value transactions noticed in the bank accounts of three of the Noticees - Beejay Investment and Financial Consultants between September 10, 2011, and December 21, 2012.
SEBI ordered an investigation into the dealings of the said entities for the period from September 01, 2011, to September 30, 2012, as the said entities were barred from accessing the securities market by SEBI for the said period.
According to the investigation, the Debarred Entities -Beejay, Eversight, and Sunil Jain-transferred funds directly to Trading Entities -Neelanchal Mercantile Private Limited(Neelanchal), Divyadrishti Merchants Private Limited(DDM), and Divyadrishti Traders Private Limited(DDT), and in some cases indirectly to the said Trading Entities via conduit Entities -Sun (Flex).
These funds were then transferred to various stockbrokers by the TradingEntities. The Debarred Entities were said to have taken this detour to gain access to the securities market in order to avoid the SEB's restraint orders.
The Trading Entities then transferred these funds to various stock brokers. The SEB's restraint orders were said to have forced the Debarred Entities to take this detour in order to gain access to the securities market.
"During the investigation period, there were 120 instances of fund flows from the debarred entities to the trading entities for a total amount of Rs 59,67,00,000," the order noted.
Sebi has ordered 20 entities to disgorge Rs 3,30,52,904 and has barred certain entities from accessing the securities market for varying periods of time for violating market norms. Aside from the firms, the regulator has issued orders against the directors of the companies in question.