Pentamedia, Zee, GTL fined: Govt

KP group had Rs 1,993 crore undisclosed income

The government action against the promoter-broker nexus behind the artificial inflation of the K-10 scrips prices during the 2001 stocks scam has resulted in three companies being penalised. Zee Telefilms, Global Tele-systems Ltd and Pentamedia Graphics will pay a total of Rs 2.7 lakh to the Securities and Exchange Board of India (Sebi).

The action taken report on the recommendations of the Joint Parliamentary Committee (JPC) on the stocks scam was tabled by Finance Minister Jaswant Singh in Parliament today.

The report said the regulator found that Zee Telefilms, Global Tele and Pentamedia Graphics violated the provisions of the Sebi (Substantial Acquisition of Shares and Takeover) Regulations, 1997, and levied penalties of Rs 60,000, Rs 1.2 lakh and Rs 90,000 against the three companies.

The cases refer to the role of promoters and corporate entities in manipulating share prices of particular scrips. The department of company affairs found that some corporate houses misused Section 372A of the Companies Act to transfer large sums of money to the Ketan Parekh group.

Sebi has also launched a move to prosecute Padmini Technologies and its whole-time directors, besides commencing adjudication proceedings against 12 promoter groups of Ranbaxy Laboratories Ltd for alleged contravention of Section 15(A) of the Sebi Act.

It has also granted a personal hearing to Dinesh Dalmia, the promoter of DSQ Software.

The report also said the income-tax department had found an undisclosed income of Rs 1,993.26 crore with the KP group and demanded Rs 1,357.37 crore in taxes from it. This followed a search by the income-tax department in March 2001.

The report said the Cabinet had advised the department of company affairs to bring a new legislation to replace the Companies Act of 1956, instead of amending it. The proposed legislation will cover the phenomena of multiple investment companies floated by the same corporates and preferential allotment rules among others.

In line with the recommendations of the Joint Parliamentary Committee (JPC), Sebi has ordered the inspection of 479 brokers at different exchanges, including the Bombay Stock Exchange and the National Stock Exchange, to verify whether the fees they received from investors were in tune with their turnover in different capital markets.

The report also said investigations against Zee by the Enforcement Directorate for possible violations of the foreign exchange rules were at an advanced stage.

The JPC had asked the government to report to Parliament every six months on the progress made on the observations made by it in its report on the stocks scam.

The report said the inspection of brokers were part of an enhanced inspection programme undertaken in various exchanges by Sebi from this financial year.