The court slapped a fine of Rs two lakh on convict S P Awashti and Rs five lakh on his firm Alaknanda Agrotech Ltd, saying the legislature considered as serious the offences where "ultimate loser is unwary and unorganised investors".
The court sentenced the advocate saying "as already held, the company accused had mobilised funds to the tune of Rs 18.47 lakh and there is nothing on record which may suggest that the said amount was refunded to the investors till date."
The court rejected Awasthi's plea for leniency, which he sought on the ground of being an an advocate and remaining director of the company only for a short period.
The court also allowed SEBI to take appropriate steps for realisation of fine amount after tracing out the assets of the convict company.
Alaknanda Agrotech Ltd is among hundreds of companies, which floated collective investment Schemes (CIS) and against whom SEBI had filed complaints between 2003 and 2005, seeking their prosecution for raising huge funds from public without getting prior approval from it as prescribed under the SEBI Act.
The market regulator explained that after CIS regulations came into the force, a public notice was issued on December 18, 1997, for either registration of the Collective Investment Scheme with SEBI or winding it up after returning investors' fund, but the accused continued to operate without paying heed to the statutory provisions. (MORE)
