SEBI Slaps Rs 41 Lakh Fine On Entities For Violating Regulatory Norms

The Securities and Exchange Board of India (SEBI) has imposed fines amounting to Rs 41 lakh on three entities for violating regulatory norms related to Alps Motor Finance Ltd.
Brij Kishore Sabharwal has been fined Rs 20 lakh, Himanshu Agarwal Rs 15 lakh, and Alps Motor Finance Ltd (AMFL) Rs 6 lakh.

This action was taken by SEBI following an investigation conducted to determine potential misutilization of funds from preferential allotments made by AMFL.
Alps made six preferential allotments between June and August of 2013. The study lasted from June until August of 2013.

In its probe, Sebi's Adjudicating Officer Amit Kapoor said, "I note that the preferential allotment and disbursal of loans out of the proceeds of preferential issue took place during the tenure of the Noticees (Sabharwal and Agarwal) as directors, and that they were signatory of the bank account in which allotment proceeds were received and from which disbursal of loans was done."Alps Motor Finance, Sabharwal, and Agarwal are thus held vicariously liable for AMFL's actions, which breached the PFUTP (Prohibition of Fraudulent and Unfair Trade Practises) laws.

Furthermore, AMFL had failed to provide the exchange with a quarterly statement indicating the losses it was suffering as a result of the manner in which the proceeds of the preferential issues were distributed, preventing shareholders from receiving critical information about the firm's profitability, according to Sebi.

As a result, it has been proved that Alps Motor Finance violated the conditions of the listing agreement under the Securities Contracts (Regulations) Act (SCRA). The SCRA listing agreement is now subject to Sebi LODR (Listing Obligations and Disclosure Requirements) rules.

Meanwhile, in three separate decisions, the regulator fined three businesses - Khaitan Beverages, Samarth Fincap Services, and Sangeeta Jhawar - Rs 5 lakh apiece for engaging in non-genuine transaction on the BSE's illiquid stock options section.

The order was issued when market regulator Sebi identified a large-scale reversal deal on the BSE's illiquid stock options segment, which resulted in misleading volumes on the exchange.

Following that, from April 2014 to September 2015, the regulator investigated the trading actions of various businesses involved in the segment.